LESSONS 



ON 



PRACTICAL SUBJECTS 



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LIBRARY OF CONGRESS. 



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Shelf Jti.&-J-_? 3 

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UNITED STATES OF AMERICA. 



LESSONS 



PEAOTICAL SUBJECTS. 



H / ^/Uu^ i $ocv%#M* T&*Ahtszs 



LESSONS 



PRACTICAL SUBJECTS 



GRAMMAR-SCHOOL CHILDREN. 



By S. F. 

AND > 

C. W. F. 




BOSTON: 
LITTLE, BROWN, AND COMPANY. 

1885. 



* °.H ^ 



Copyright, 1885, 
By Little, Brown, and Company. 



University Press: 
John Wilson and Son, Cambridge. 



CONTENTS. 



Page 

Introduction 7 

Suggestions to the Teacher 11 

Chap. I. What is Barter ? 13 

II. What is Monet? 18 

III. How did Paper come to be used in 

Place of Coin? 31 

IV. How did Paper come to be used in 

Place of Coin? (continued) 38 

V. What are Greenbacks ? 44 

VI. What is Irredeemable Paper Money? 

and What are Bluebacks ? . . . . 52 
VII. What is Irredeemable Paper Monet ? 

(continued) 58 

VIII. What are United States Bonds ? . . . 63 

IX. What is a Tax ? 71 

X. High and Low Taxes 81 

XI. High and Low Taxes (continued) ... 86 

XII. What is a Corporation ? — Mills ... 92 

XIII. What is a Corporation? (continued.) — 

Eailroads 98 

XIV. What is a Strike? 104 

XV. What is a Strike ? (continued) .... 114 

XVI. Debt and Saving 121 

XVII. Debt and Saving (continued) 129 

XVHI. What are Savings Banks? 134 

XIX. What are Savings Banks? (continued) . 145 



INTRODUCTION. 



TIN" the elementary education which is given in 
-*■ our public schools, it is necessary that those 
studies should be chosen which will best fit 
the majority of children for the practical life 
into which they must enter. With most chil- 
dren that life begins when they leave the gram- 
mar schools, and whatever education they are 
to have (using the word education in the limited 
sense of school instruction) they receive while 
there. Therefore, the determining of the course 
of studies becomes of great importance. 

The question is chiefly one of selection ; and 
should we not consider whether, in our public 
schools, the more essential studies are not often 
sacrificed and crowded out for the less useful 
ones ? Will the ability to recite by rote the 
rules of grammar, or to name in order the vege- 
table and mineral products of Uruguay, help a 
boy in his daily life as well as a knowledge of 
some of the more important laws of health ? or 



8 INTRODUCTION. 

make him as good a citizen as a few sound ideas 
on government and economic laws ? 

In watching some of the phenomena of 
American politics, it is plainly seen that a 
great body of our voters — and often of our 
legislators, too ! — are lamentably ignorant of 
even the simpler laws underlying the social 
and financial questions of our age. One well 
known example of such ignorance is the 
" Greenback craze " of 1873 and 1874 There 
would also seem to be in the minds of many 
people a very vague idea as to the sources of 
government revenues ; and, resulting from this, 
an apparent belief that the United States gov- 
ernment has absolutely unlimited supplies of 
money at its command, and that no harm can 
come to the country at large from a lavish ex- 
penditure of this public money. Other misap- 
prehensions of this nature are not far to seek. 

It is impossible to suggest a panacea for such 
evils, and of course long years of experience 
are the most efficacious teachers on these sub- 
jects. But though political economy is a sci- 
ence all the data of which are by no means 
as yet known, some few of its laws appear to 
have been sufficiently well established to act 
as guides in every-day life. 



INTRODUCTION. 9 

In view of this fact, it has occurred to us, 
that, if a few of the more practical questions 
dependent on these laws could be treated in a 
way simple enough for a child to comprehend, 
it might be possible to give our school children 
right ideas at the outset. 

If such topics so treated were to be intro- 
duced into our public schools, the graduates of 
such schools, when called upon in after years to 
vote on social or financial subjects, might not be 
so wholly unprepared as they now are. 

As a first step to this kind of instruction, we 
have tried to put the following lessons on 
money, banks, etc.. in a form available for 
grammar schools, where, as we have said, the 
school life of the majority of the children ends. 
It is easily seen that children find it difficult to 
grasp an abstract idea; we have, therefore, 
tried to make the whole work as little compli- 
cated as possible, emphasizing principles rather 
than details, and making use of simple lan- 
guage and frequent repetition. For the same 
reason, we have avoided the complicated his- 
tory of money by using sometimes purely myth- 
ical cases, and have tried to deal only with 
those principles which seem, as we have said, 
to have been well established, leaving out dis- 



10 INTRODUCTION. 

puted points as far as possible. We have pur- 
posely left untouched the intricate workings of 
moneyed corporations, and exchange, — assum- 
ing that the United States government always 
sells its bonds at par, and greatly simplifying 
the process of paying off the bonds, and also 
assuming that our corporation sells its stocks 
and bonds at par, — because we felt that ex- 
tensive explanations would hopelessly confuse 
a child's mind, and prevent its retaining any 
clear ideas whatever on these subjects. A few 
facts we have tried to emphasize especially; 
such as, that money follows fixed laws, which 
cannot be broken with impunity by any gov- 
ernment ; that harm is done to all — and most 
of all to the poor — by extravagance in the use 
of public money; and that actual evils often 
attend the contracting of debts. 

We feel that the subjects treated are equally 
important to boys and girls, — perhaps more im- 
portant to girls, because they have less practical 
experience to guide them in their lives, and 
in money matters are more liable to lose their 
savings by ignorant investments. 

Well aware of the imperfections in our work, 
we hope that, should it fail in its object, it may 
at least serve as a suggestion, to some one bet- 
ter fitted, to carry out the idea. 



SUGGESTIONS TO THE TEACHER 



'T*HE following lessons on matters concerning every- 
■*■ day life are designed for the older children of our 
grammar schools. Not wishing to burden them with 
another separate study, we have tried to combine our 
work with that of composition writing, (which already 
forms a part of school instruction,) intending that the 
different topics shall be taken as subjects for that exer- 
cise. As a rule, the lessons will probably not be intel- 
ligible to children under twelve, and, in any case, it will 
be necessary to proceed very slowly and carefully in 
giving them to the advanced classes. 

Our plan is as follows : — Let the first chapter be 
read to the children slowly, and with any additional 
explanation, or illustration, of the subject that may 
occur to the teacher. The teacher may then ask the 
questions 1 given at the end of the chapter, or may test 
the children's understanding of what has been read in 
any way that commends itself. 

It is suggested that on the following composition day 
the children shall hand in abstracts of the lesson. The 

1 The questions are all numbered, and in the text the 
corresponding number is affixed to the paragraph containing 
the answer. 



12 SUGGESTIONS TO THE TEACHER. 

best of these may "be read before the class, and the 
scholars asked to criticise them. If the subject appear 
to be fully understood, the teacher may go on to the 
next lesson ; if not, it would be well to read the first 
one again, and question the children ; and if it seems 
desirable, they might write again on the same subject. 

But it is not thought best to have them learn the 
lessons by heart, as what is learned mechanically is gen- 
erally soonest forgotten. 

Thus let each lesson be treated in turn, with such 
reviews as may be necessary to make the children re- 
tain the main points clearly in their minds. 

It is further suggested, that, whenever it is possible, 
the teacher should illustrate the lesson by facts and sta- 
tistics of local interest, thus giving the exercise some- 
thing of the force and value of an object lesson. Town 
reports and almanacs may be useful for this purpose. 

If any of the scholars- show a special aptitude for or 
interest in such studies, they should be directed by the 
teacher to more advanced and thorough treatises on 
these subjects. 1 

1 Any such boy or girl should be put in communication 
with the Society for Political Education. Circulars can be 
obtained from its publishers, Messrs. G. P. Putnam's Sons, 
27 West 23d St., New York ; Jansen, McClurg, & Co., 119 
State St., Chicago ; W. B. Clarke & Carruth, 340 Washing- 
ton St., Boston. 



LESSONS ON PRACTICAL SUBJECTS. 



CHAPTEE I. 

WHAT IS BARTER ? 

TN" all civilized countries people are so aecus- 
■*■ tomed to the use of gold and silver money, 
that they seldom stop to think that there was 
once a time when these precious metals were 
not used in buying and selling. 

We will try to give you some idea of how 
people managed to get along without money in 
those old days, — how they first felt the want 
of it, and how at last gold and silver came to 
be used for that purpose. 

In the earliest ages of the world every man 1 
hunted and fished for himself, made his own 
weapons and such clothing as he used, and did 
not buy or sell anything. But if one man had 2 
collected more bear-skins than he needed and 
wanted some venison, he looked about for some 
other man who had more venison than he needed, 



14 LESSONS ON PRACTICAL SUBJECTS. 

and then the first man exchanged his extra 
bear-skins for the other man's venison. 

3 This process of exchanging goods is called 
barter. It is the simplest kind of trade, and is 
still the only way of doing business among 
some savage tribes. Very likely some of the 
boys present have exchanged, or as they would 
say " swopped," knives for fish-hooks, tops, or 
marbles. This is really bartering, and it is 
the way in which our ancestors did all their 
business centuries ago. 

4 But by and by there came to be more people 
in the world, and they used more kinds of 
things. It was not always easy to find two 
persons who wanted each other's goods. Tor 

5 instance : " A tailor has only clothes to sell. If 
he wanted a loaf of bread, and barter still pre- 
vailed, he would have to offer a baker some 
article of clothing — a coat, for instance — in 
exchange for bread. But probably the baker 
would have all the coats he needed. He might 
say he wanted a stove. Then the tailor would 
have to find a stove-maker who was willing to 
exchange a stove for a coat, get a stove in this 
way, and then give the baker the stove for the 
bread. If he could find no such stove-maker, 
he would have to hunt for another baker. He 



WHAT IS BARTER? 15 

might starve before he could find any person 
having bread to sell who wanted a coat." 1 
Though there were no such things as stoves in 
the days of which we speak, there were other 
things which could be bartered; and you can 
easily see that people were sometimes put to a 
great deal of trouble in trying to exchange the 
things they did not need for others which they 
did need. They began to wish for some one 6 
thing which everybody would be willing to take 
in exchange for his goods, — knowing that he 
could exchange it again for anything that he 
wanted. 

At last, cattle came to be used for this pur- 7 
pose ; for at one time these animals were the 
most useful and valuable possessions of a peo- 
ple. They gave men hides for tents and cloth- 8 
ing, meat to eat, and milk to drink. They 
could be moved from place to place with care 
and time, and would last for some years. A 
man's wealth was then reckoned in cattle ; for 
instance, instead of saying, " He is rich, he is 
worth ten thousand dollars, " they said, " He 
is rich, he owns a thousand cattle." People 9 
were willing to exchange their goods for what 

1 Primer of Political Economy, by A. B. Mason and J. J. 
Lalor, page 52. 



16 LESSONS ON PRACTICAL SUBJECTS. 

was worth so much, and in this way cattle came 
to be used as a help in making exchanges. At 
this time, if a man had bear-skins he was not 
obliged to wait until he could find a man who 
wanted to part with his venison, and at the 

10 same time wished a bear-skin, but he could sell 
his skins at once for cattle, and then could sell 
his cattle for venison. The owner of the veni- 
son might not want bear-skins, but he would be 

11 quite willing to take cattle in payment for his 
venison, knowing that he could readily exchange 
his cattle for any article he did want. 

We have said that people felt the need of 
some one thing, which everybody would be will- 
ing to take in exchange for his goods. Suppose 

12 they had settled on gravel or earth as this one 
article, and had said, " If a man wants to ex- 
change a coat for a pair of shoes, let him take 
a bushel of gravel for the coat, and then ex- 
change the gravel for the shoes." You can 
easily see that this would be absurd ; for men 
would not be willing to exchange their coats 
and shoes for something of so little value as a 
bag of gravel. Would any boy present ex- 
change a four-bladed knife for a handful of 
pebbles ? It is clear, then, that people must 

13 have something in exchange for their goods, 



WHAT IS BARTER? 17 

that is worth more to them than the article 
they wish to sell. 

As cattle were the most useful and valuable 
articles they owned, they used them as their 
means of exckange ; and by using a means of 
exchange, or, as people say, a "medium of ex- 
change," a great deal of time and trouble is 
saved. 



Questions on Chapter I. 

1. How did men live in the early ages ? 

2. How did they manage to get articles they wanted, 
if they had no money to buy them with ? 

3. What is barter ? 

4. As there came to be more people in the world, 
what trouble arose in bartering ? 

5. Who can tell about the tailor who had clothes to 
exchange ? 

6. What did people begin to wish for, in making 
their bargains 1 

7. What means of exchange did they use at last ? 

8. Why did they take cattle ? 

9. Why was every one ready to exchange his goods 
for cattle 1 

10. How did they then make their exchanges ? 

11. Why was it easier to make exchanges by means 
of cattle ? 

12. Why would not gravel have answered as well as 
cattle ? 

13. What do people always want in exchange for 
their goods ? 



18 LESSONS ON PRACTICAL SUBJECTS. 



CHAPTER II. 

WHAT IS MONEY? 

TN the first chapter, we have seen how people 
■*■ felt the need of having some one article to 
use as a medium of exchange for their goods, 
and how they came to use cattle for this pur- 
pose. We will now show what difficulties 
arose from the use of this medium. 

Although the use of cattle as a medium of 
exchange was more convenient than the plan 
of barter, as time went on new difficulties came 
up. Cattle were liable to be sick, or killed by 
accident. It was troublesome to drive them 
long distances, and not easy to make small pur- 
chases with them. 

For instance, a man with plenty of cattle 
wished a few fishhooks. But an ox was worth 
hundreds of fishhooks. It would not do to cut 
a piece off the ox, for that would injure the 
whole animal ; nor would it be worth while to 



WHAT IS MOSEY? 19 

kill him, and give a little of the meat for the 
fishhooks. For if the owner of the ox only 
wished to bny fishhooks, the rest of the meat 
might spoil before he could eat it up, and the 
ox be wasted. So unless the man was willing 
to take a whole ox- worth of fishhooks, he must 
have something else besides cattle for money ; 
that is, he must give something else in ex- 
change for the half-dozen fishhooks which he 
wanted. 

So men found that they needed a medium 3 
of exchange, which could be divided without 
making it worth less, and also something that 
was not so easily injured as cattle. Then they 
said: "We need for a medium of exchange 4 
something that is useful and valuable, and 
that every one will be willing to take in 
exchange for his goods ; something not easily 
injured, and that will last a long time ; 
something that is easy to carry about ; some- 
thing that can be easily divided without 
harming it, so that we can buy things of 
small value with it, as well as things of great 
value." 

Cattle are valuable, but they cannot be di- 5 
videcl without being killed; and they can- 
not easily be moved long distances. Pebbles, 



20 LESSONS ON PRACTICAL SUBJECTS. 

though durable and easily carried about, are of 
little value ; therefore they would not be useful 
as a medium of exchange. Food of various 
kinds is most valuable. Some kinds of food 
(apples, for example) can be easily carried about, 
and be readily divided ; but they would soon 
spoil. 

There was at this time, however, a substance 
much prized by everybody, and this was iron. 
Let us see if it had the qualities to make it a 
good medium of exchange. It was valuable, 
and the most useful of metals. It was rare : 
not to be picked up like pebbles, but got 
by hard work. Iron could be easily divided 
without injuring its value ; therefore it was 
better than cattle to use for a medium of ex- 
change. While there was so little of it in the 
world, each piece had a great value, and there- 
fore not much was needed to make large pur- 
chases ; enough could be easily carried about 
to-buy all a man wanted ; while it could be so 
much divided that he could buy things of small 
value as well as things of great value with it. 
Lastly, it would keep far better than anything 
that had been used before. 

So men took iron for their medium of ex- 
change, and made it into pieces of a certain 



"WHAT IS MONEY? 21 

size and weight. Then, instead of saying, 
" This horse is worth twenty bear-skins, or three 8 
head of cattle," they now said, " This horse is 
worth twenty-five pieces of iron ; this goat, ten 
pieces ; that tent, fifteen." And now, if a man 
owning goats wanted a tent, he sold a couple 
of them for twenty pieces of iron, and bought 
his tent for fifteen pieces, keeping the extra 
five pieces for anything he might wish. Thus 
men could now measure the value of their 
property by pieces of iron of a certain size and 
weight. 

Formerly, when a man said his fine horse 9 
cost him six head of cattle, you could not tell 
whether they were fat cattle or lean, whether 
they were healthy or diseased, young or old. 
One ox might be worth twice as much as an- 
other, or an ox that to-day was valuable would 
fifteen years hence be old and useless. But 
iron was an almost unchanging measure of the io 
value of all other articles. The iron pieces 
were all of the same size, and one piece was 
worth as much as another, and one piece was 
as good to-day as a year ago. So when a 
man said his horse cost him one hundred pieces 
of iron, people knew just how valuable the 
horse was. 



22 LESSONS ON PRACTICAL SUBJECTS. 

As years went by, however, more iron was 
discovered, and thus it became plenty ; and 
because it was plenty and easier to get, peo- 

11 pie did not value it so much, and would not 
exchange a bear-skin for the same number 
of iron pieces as before, but demanded more ; 
until, as iron grew very plenty, so many pieces 
had to be given in exchange for a single article, 
that people had to carry about a great deal of 
iron to make their purchases. Such quantities 

12 of iron were too bulky and troublesome to use 
every day in buying and selling. One bad 

13 quality it had always had : it rusted, and so 
wore out, not quickly as cattle grow old, but 
by degrees. 

Then men said, "What must we have 
for money ? no one wants to exchange his 
goods for this heavy iron, which is so trouble- 
some to carry about in large quantities; and 
small quantities of it will buy nothing of value ; 
besides, it rusts. It is as useful as ever, but 

14 we must have something that is not so easily 
got, and a small amount of which will buy a 
great deal, because it is rare." 

People were glad to have iron ; for they 
had learned to make it into pots and kettles, 
swords and spears, so that it was even more 



WHAT IS MONEY? 23 

useful than before. But when they had to 
take such quantities of it to make their ex- 
changes with, it lost one of the qualities which, 
you remember, made iron a good medium of 
exchange ; namely, that it should be something 
easy to carry about. 

They tried copper and perhaps other metals, 
but at last they decided on gold and silver. 

These metals were useful in some ways, and 15 
they were much valued for ornaments. They 
were not easily injured, like cattle, and could 
be readily carried about ; they could be divided 
into small pieces without injuring their value, 
and their value did not change from day to 
day, but was always about the same ; they did 
not rust, like iron; they were very rare, and 
men had to work a long time in the mines be- 
fore they could get even a small pile of gold. 
Silver was not so rare as gold, but in those 
days it was very precious and hard to get, and 
there were only a few places where it was 
known that either of these metals could be 
found. 

For a time, gold-dust, or lumps of silver and 16 
gold, were used to exchange for food or clothing ; 
but it was very inconvenient to have to stop 
to weigh out gold or silver for each purchase 



24 LESSONS ON PRACTICAL SUBJECTS. 

that was made ; besides, people did not always 
give fair weight. 

To save all this trouble, the gold and silver 

17 were made into pieces of different sizes, which 
represented different values ; and all the pieces 
of the same value were of the same size and 
weight. These pieces were stamped to show 
how much gold or silver was in each, and were 
called coins; and the coining gradually came 
to be done by the government, in a place called 

18 the mint. We now call these coins money. 1 

And so it was that gold and silver came to 

19 be used as a measure of the value of all other 
articles, and as a medium of exchange. 

We will point out to you still another ad- 
vantage in using gold and silver. They were 
valued not in one country alone, but in all 

20 countries where they existed ; and you can 
easily see how it would help in making ex- 
changes of goods to have the same article 
used for a medium of exchange all over the 
civilized world. For example, suppose one 

21 country used rare shells as a medium of ex- 
change, and another one used bright-colored 
feathers. Yet the natives of the first country 
might not care for feathers in exchange for 

1 Let some child look out the derivation of money. 



WHAT IS MONEY? 25 

their goods, and those in the second country 
might consider shells as rubbish, and refuse 
them in exchange for their goods. In this case, 
the people of these countries would have the 
same trouble in making their exchanges, that 
the tailor did who wanted a loaf of bread in ex- 
change for a coat. Now, if both countries used 
gold, the people of each would readily receive 
it in exchange for their goods, because it would 
be equally valued in both, and could be used 
in making their purchases at home. 

We have tried to make you see why gold 
and silver are the best metals to use for a 
medium of exchange, and so, when we speak 
of their great value, we mean that they are 
valuable principally because of this use. On 
account of their beautiful colors, and capacity 
for taking a high polish, gold and silver are 
also valued for ornament, and they are used for 
many other purposes. 

Still, in most of the useful arts we could 
more easily spare gold and silver than iron and 22 
steel. If all the silver spoons and gold breast- 
pins were swept into the sea, we could still live 
quite as well, and eat with iron or steel spoons, 
and use iron breastpins. But suppose all our 
iron and steel were swept into the sea. Then 



26 LESSONS ON PRACTICAL SUBJECTS. 

we could only plough with wooden ploughs; 
we could hardly cut trees to make the wooden 
ploughs. We could not have spades, axes, or 
carpenter's tools, because silver and gold alone 
are too soft metals for such uses ; besides, they 
are too scarce, and we have not gold and silver 
enough in the world to have ploughs and axes 
made from them, even if they were the best 
metals for those purposes. 

23 We are right to prize gold and silver as a 
medium of exchange, or money, because, as we 
have shown you, they are the best articles that 
have yet been found for this purpose, and save 
great inconvenience. You will easily see, how- 
ever, from what we have said, that their chief 
value is as a medium of exchange. If you 
were in some spot where there was nothing to 
exchange, for instance, on a desert island, which 

24 would help best to keep you alive, — three 
bags of gold ; or a bag of potatoes, a bag of 
corn, and a good iron spade ? 

When we think of these things carefully, we 
shall find that the articles we need most are 
those which we value most, — all, in fact, that 
we need to warm, feed, and clothe ourselves 
with ; such as corn, meat, wood, coal, leather, 
etc. And, as we have explained before, it is 



WHAT IS MONEY ? 27 

because of the inconvenience of carrying these 
things about to exchange for one another, that 
men have agreed that gold and silver shall be 
carried about instead, and used as money in 
buying and selling. 

Now let us see, once more, if gold and silver 
have all the necessary qualities for a measure 
of values and a medium of exchange, or money. 

1st. They are useful for various purposes. 25 
2d. They are rare, and cannot be obtained with- 
out labor, and therefore people are willing to 
take them in exchange for their goods. 3d. 
They are durable, that is, they last a long time. 
4th. Their value changes little from year to year. 
5th. They can be easily divided without lessen- 
ing the value of each part ; for a pound of gold 
is worth just as much made into dollars as it 
would be in one lump ; and a twenty-dollar gold 
piece is worth just as much as twenty one-dollar 
gold pieces. 6th. They are also valued all over 
the civilized world as a medium of exchange. 
7th. They can be easily carried about. 

To sum up all in a few words : u As people 
first used cattle and other valuable things to 
help them in making exchanges of goods, so 
now exchanges are made by means of gold and 
silver money." As "lengths are measured by 26 



28 LESSONS ON PRACTICAL SUBJECTS. 

inches, feet, yards, etc.; weights, by ounces, 
pounds, etc. ; time, by minutes, hours, days, and 
years ; " so " values are measured by money. 
27 Money, therefore, may be defined as a medium 
of exchange and a measure of value. " l 

Just now, 1884, so much silver has been 
discovered that it is not as good a measure of 
values as it was. It is getting to be, like iron, 
too cumbersome to carry about and use, so that 
perhaps by and by we shall use only gold for 
our measure. But this is a question to be 
thought and talked about in the years to come. 



Questions on Chapter II. 

1. Why did not people keep on using cattle as a 
means of exchange 1 

2. What was the trouble in buying things of small 
value with cattle 1 

3. What other qualities, then, must their means of 
exchange have? 

4. Name the qualities that men found were needed 
for a good medium of exchange. 

5. Give the good and bad qualities, as mediums of 
exchange, of cattle ; of pebbles ; of apples. 

6. What did people take in place of cattle for their 
measure of values ? 

1 Primer of Political Economy, page 53. 



WHAT IS MONEY? 29 

7. What did they do to the iron, to make it more 
convenient to use as a medium of exchange ? 

8. When iron was thus divided, how did people 
measure the value of things % 

9. Give another reason why cattle proved an unsat- 
isfactory measure of value. 

10. Why were the iron pieces a better measure ? 

11. What effect did the discovery of more iron have 
on the buying and selling ? 

12. What trouble arose from carrying about so 
much iron money 1 

13. Iron had one poor quality as a money : what 
was it ? 

14. Name two qualities that men found their medium 
of exchange needed. 

15. What made people think of gold and silver, and 
choose them for a medium of exchange, instead of lead, 
or anything else % 

16. In what shape did people use gold and silver 
in making their exchanges 1 Why was this incon- 
venient 1 

17. What was afterwards done to these metals to 
make them more convenient to use for this purpose ? 

18. What are these coins called 1 

19. So gold and silver came to be used for what 1 

20. Why is it an advantage to have a common me- 
dium of exchange all over the world ? 

21. Give an example. 

22. Which metal could we best do without, in the 
useful arts, gold, silver, or iron ? Why ? 

23. Why are we right to prize gold and silver as a 
medium of exchange 1 



30 LESSONS ON PRACTICAL SUBJECTS. 

24. If you were on a desert island, what articles 
would be of most value to you 1 Why ? 

25. Name now the seven qualities that a medium 
of exchange must have. 

26. How do we measure lengths, weights, etc. 1 

27. Then what is money ? 



HOW DID PAPER COME TO BE USED ? 31 



CHAPTER III. 

HOW DID PAPER COME TO BE USED IN PLACE 
OF COIN? 

TTAVING told you how and why gold and 
- 1 - - 1 - silver came to "be used as money, it now 
remains to tell you how and why paper came 
to be used with them as money. We shall not 
try to tell you how any one country came to 
use paper, or, as it is commonly called, paper 
money, in place of coin ; for it would be hard to 
give an exact account of it, and harder still for 
you to follow such a history. But we will try 
to make you understand how paper money is 
used ; and, in order to make the matter clearer 
to you, we will suppose that there was a coun- 
try called ISTo-Man's-Land, and explain to you 
how the government of that country came to l 
use paper instead of coin. 

As you probably know, a government has 
need of soldiers and sailors, and many officers 
of all kinds. All these men must be paid for 



32 LESSONS ON PRACTICAL SUBJECTS. 

their services. The money for this purpose is 
generally raised by taxing all the people of a 
country, because these soldiers, sailors, etc., are 
employed to protect the whole country. 

You can easily see how difficult and dan- 
gerous it would be to send sums of gold and 
silver over a large unsettled country to pay 
these men wherever they were. We will sup- 
pose, therefore, that the government of No- 
Man's-Land found the following way out of 
the difficulty. 

; A quantity of paper was cut into pieces of 
the same shape and size, and on each of these 
pieces two things were printed: first, a num- 
ber, showing the amount of coin the paper was 
to stand in place of; second, a promise that, 
whenever the owner of this paper wished, the 
government would give him in exchange for 
the paper whatever sum of coin was promised 
on it. These papers were used instead of coin, 
and sent all over the country. Gold and sil- 

t ver to the amount of the paper in use was 
kept in the government treasury, where it was 
safe ; while the paper money was carried about 
easily and with less risk The promise of the 
government to pay coin, which was on this 
paper, was held to be as good as the money 



HOW DID PAPER COME TO BE USED ? 33 

itself, so people were quite willing to use the 
paper ; moreover, it was much, more convenient 
to handle. But you must remember that the 
paper was not really money, only a promise to 
pay gold or silver money. 

The government having promised to give 
coin for the paper whenever the owner of the 
paper wanted it, coin for that purpose had to 5 
be kept on hand. This coin was got by taxing 
all the people of the country every year, and 
was kept in one place, called the Treasury. 

If a thousand dollars of paper money were in 
use, or, as we say, in circulation, then a thou- 
sand dollars of coin were kept in the treasury 6 
ready to be exchanged for the paper money. 
If a man had some paper money, and for any 
reason wanted coin instead of it, he carried his 7 
paper to the treasury and received for it the 
same sum in coin. This was called redeem- 
ing 1 paper money. Thus the government of 
No-Man's-Land redeemed its promise printed 
on the paper. 

Whenever any of the paper money had s 
been redeemed, it was at once destroyed; for 
if it had been sent out again, and used by the 

1 Bequire the child to look out this word in the dictionary, 
and define it to the class. 

3 



34 LESSONS ON PRACTICAL SUBJECTS. 

people, — the coin for it having been already 
paid out of the treasury, — there would have 
been less coin in the treasury, but there would 
have been just as much paper in circulation as 

9 before. Thus there would not be as much gold 
in the treasury as there was paper in circula- 
tion, and it might happen that more paper 
would be presented for redemption than there 
was coin in the treasury to redeem it with. 

Remember that we have been supposing the 
existence of a certain government, and the way 
it used paper money. Henceforward we shall 
speak of what has really happened. We wish 
to point out to you now, that, when any country 
had once adopted the use of paper for money, 

10 there was this danger in using it ; viz. people 
forgot after a time that it was not really money, 
but only something used in place of money ; 
they forgot that it had no value in itself, but 

li was made valuable only by the promise of the 
government that coin should be paid for it 
whenever the owner wished it. 

We have seen how paper money is used as a 
convenience, and have learned that it had no 
value except as a promise to pay something 
valuable. In the history of the world there are 
many accounts of rulers who, because they had 



HOW DID PAPER COME TO BE USED ? 35 

spent their gold and silver, have tried to make 
themselves rich again by making money out of 12 
such cheap substances as leather or paper. They 
have fancied that they could force their subjects 
to use this cheap money if they merely stamped 
it with the royal seal, and declared it to be 
money. These rulers never meant to redeem 
this money with gold or silver. Their plans, 
however, never succeeded. 

Long ago, in the middle of the fourteenth 
century, the Emperor of China had a kind of 
paper made from the bark of a tree, and stamped 13 
it with the royal seal. Whenever he bought 
any article of his people, or paid his soldiers, he 
obliged them to take this paper money. At 14 
first, he paid part of his debts in coin, and part 
in paper ; but by degrees he came to pay them 
all in paper. He saved no gold to redeem his 
paper with. 

Thus more and more paper money came into 
use. But, in spite of the Emperor and his seal, 
when his people found they should never get gold 15 
for their paper, they asked more paper money for 
each article they sold, until at last it took one 
thousand pieces of paper money to buy as much 
of any kind of merchandise as could be bought 
by one little copper coin, called a " cash/' 



36 LESSONS ON PRACTICAL SUBJECTS. 

All the despotic power of the Chinese Em- 
peror could not force his people to sell their 
hardly earned property, or give their work, in 
exchange for a paper money that was worth so 
16 little. So the Emperor was obliged to return 
to the use of gold and silver money in his 
empire. 

You see, the Emperor saved no gold to ex- 
change for the paper, and he never at any time 
meant to save any. 1 He wanted rich food and 
clothes, and did not wish to pay for them in 
coin ; but as paper depends on gold and silver 
for its value, when there was no gold and silver, 
and no hope that there would be any saved at 
some future time, there was almost no value to 
the paper. 

To force a man to take a handful of gravel 
in exchange for a barrel of potatoes might be 
possible; but the man would not do it if he 
could help himself. It is equally difficult to 
force him to sell his potatoes for a handful of 
worthless paper ; if he can, he prefers to keep 
the potatoes. 

1 The teacher might here mention what a check is ; and 
explain, by way of illustration, that, if a farmer had money 
in a certain bank, he could pay his laborer by giving him a 
check on that bank ; but that, if the farmer had no money in 
the bank, a check on that bank would be worthless. 



HOW DTD PAPER COME TO BE USED ? 37 



Questions on Chapter IH. 

1. "What article did the government of No-Man's- 
Land use to do the work of gold and silver ? 

2. Why did not the government of No-Man's-Land 
want to use gold % 

3. What can you tell about these pieces of paper ? 

4. What was the result of making paper do the 
work of coin ? 

5. What arrangement did this government make for 
redeeming the promise of their paper ? 

6. How much gold did the government keep in the 
treasury % 

7. What is "redeeming" paper money 1 

8. What became of the paper after it was redeemed 1 

9. Why did the government not send the paper out 
again instead of destroying it 1 

10. What do you learn from this illustration about 
the value of paper money 1 

11. What was it that gave this paper money its 
value ? 

12. Why have rulers often tried to make their peo- 
ples use other substances in place of coin ? 

13. What did the Chinese Emperor use instead of 
gold or silver money ? 

14. Why did his people take this paper money 1 

15. When the people found that they could never 
get gold for this paper, what change did they make in 
their bargains 1 

16. What was the Emperor obliged to do 1 Why ? 



38 LESSONS ON PRACTICAL SUBJECTS. 



CHAPTEE IV 

HOW DID PAPER COME TO BE USED IN PLACE 

of coin ? — {continued.) 

"XT'OU must remember that gold and silver 
■*■ are valuable as money, because they 

1 have these necessary qualities, viz. : 1st. They 
are useful for various purposes. 2d. They are 
rare, and cannot be obtained without labor, 
and therefore people are willing to take them 
in exchange for their goods. 3d. They are 
durable, that is, they last a long time. 4th. 
Their value changes little from year to year. 
5th. They can be easily divided without lessen- 
ing the value of each piece. 6th. They are 
valued all over the civilized world as a medium 
of exchange. 7th. They can be easily carried 
about. 

2 Now, has paper money all of these qualities ? 
Certainly not. It can be easily and cheaply 
made, and it wears out rapidly, so it has little 
value in itself. Then, clearly, paper money 
cannot be valuable for the same reason that 



HOW DID PAPER COME TO BE USED ? 39 

coin is. If you remember rightly, it is the 3 
promise on it that makes paper money valua- 
ble. More than this, people must have good 
reason to believe that a government will keep 
its promise. The paper money of a government 
that only paid with promises, and never kept 
them, would be worth nothing. 

What provision ought a government to make 
for the keeping of its promises ? A gov- 
ernment, as you know, has a right to tax its 
people to pay for its expenses, and it ought 4 
to save a portion of the coin received every 
year from the taxes to exchange for its paper 
money. So paper money is valuable only when 
there is coin carefully kept to redeem it accord- 
ing to promise. 

But suppose all the gold had been spent 
on a war, and therefore there was none in the 
treasury ; and suppose that the people were too 
poor to pay taxes, so that there was no supply 
of gold coming into the treasury to redeem the 
paper money with. In this case, could the 
paper money be redeemed ? Of course it could 5 
not ; and so, like the Emperor of China's paper 
money, it would be good for nothing, and would 
buy nothing. 

Perhaps this will be more easily understood, 



40 LESSONS ON PRACTICAL SUBJECTS. 

if we illustrate it by the story of four boys, 
Jack, Will, Fred, and Walter, and their friends. 
These boys were in the habit of trading apples 
for nuts, pop-corn, marbles, tops, and so forth. 
But Jack, Will, Fred, and Walter, finding it 
troublesome to be always carrying about ap- 

6 pies in their pockets, hit upon the following 
plan. They each got five apples (making 

7 twenty in all), and put them in a box ; and 
another boy, Tom Grey, agreed to take charge 
of it. Then they took twenty pieces of paper, 

8 and wrote on each piece, " We, Jack, Will, Fred, 
and Walter, promise that the owner of this 
paper shall receive one apple on presenting it 
to Tom Grey." Then, when one of the four 
boys met another boy who wished to exchange 

9 peanuts or marbles for an apple, he gave him 
one of these pieces of paper ; that boy, when 

10 he wanted an apple, took the piece of paper to 
Tom Grey, and received from him an apple, as 

11 promised on the paper. Tom Grey then tore 
up the paper. 

The plan succeeded very well. As the ap- 
ples were used up, the boys brought others and 

12 put them in the box, and wrote the same prom- 
ise on new pieces of paper, one piece of paper 
for each apple. 



HOW DID PAPER COME TO BE USED ? 41 

One day, however, when all the boys were 13 
away, a cow came by, upset the box, and eat 
up all the apples. Just as Tom Grey came 
back, several boys came up to have their papers 
redeemed. Tom went to get the apples, but 
there were none to be found, so he had to tell 
the boys that the treasury was empty. The 
pieces of paper were consequently not worth 
anything. The news soon spread, and the boys 
who had exchanged their tops and other valu- 
ables for the paper were dismayed to find it was 
good for nothing. 

You see the papers depended on the apples 14 
for their value, and when there were no apples, 
the papers were worthless. 

This happened early in the summer, when 
the four boys could get no apples. But they 
had given their promises, written on the papers, 
to give one apple for each bit of paper, and had 
received the tops and marbles from their friends, 
and they felt that the promises must be kept. 
So, in the autumn, the first thing they did was 15 
to collect enough apples to give one to each 
boy who held a paper promise at the time 
when the cow eat up the apples. 

The friends of Jack, Will, Fred, and Walter 
were so much pleased to get their apples, and 



42 LESSONS ON PRACTICAL SUBJECTS. 

had liked the plan so well before the accident 

16 happened, that they persuaded Jack, Will, Fred, 
and Walter to start their pieces of paper and 
their apple-box as before, and all went on well. 
But would all have gone well if the four boys 
had not kept their promises as soon as they 
were able to ? Would their friends ever have 
been willing to take their paper promises again, 
if they had seen them eating up the apples, 
instead of redeeming the paper promises with 

17 them ? I think not. It was the feeling that 
they could trust Jack, Will, Fred, and Walter, 
that made them willing to go on as before. 

It is exactly the same with a government; 

18 it must keep its promises, and pay coin for its 
paper dollars, if its paper dollars are to be 
worth anything. 



Questions on Chapter IV. 

1. Who remembers the seven qualities that are ne- 
cessary to make a good medium of exchange ? 

2. Has paper money all of these qualities ? 

3. Do you remember, from the last chapter, what 
gave paper its value as money ? 

4. Do you also remember what a government should 
do, in order that the promise should be kept 1 

5. Suppose the treasury was empty, and there was 



HOW DID PAPER COME TO BE USED ? 43 

no coin coming in, could the paper money be redeemed 1 
What would it then be worth 1 

6. What was the plan of paper money which the 
four boys tried ? 

7. How many apples had they in the box 1 and how 
many pieces of paper money did they make 1 

8. What was written on the papers ? 

9. How did the boys use this paper in making their 
bargains ? 

10. When a boy wanted apples for his paper money, 
what did he do ? 

11. What was done with the redeemed paper money ? 

12. How was the apple treasury kept full 1 

13. What happened one day to the treasury ? 

14. What did the boys then find their papers were 
worth? Why? 

15. When the autumn came, what was done by Jack, 
Will, Fred, and Walter 1 

16. What were the four boys persuaded to do ? 

17. P>ut if the four boys had not kept their promises, 
would the other boys have been willing to take their 
paper money again ? Why not 1 

18. W r hen are people willing to take the paper money 
of real governments 1 



44 LESSONS ON PR ACTIO AL SUBJECTS. 



CHAPTER V. 

WHAT ARE GREENBACKS? 

TT7HEN the rebellion of 1861 broke out in 
* * the United States there was compara- 

1 tively little coin in the national treasury. Up 
to that time the expenses of the government 
had been light, and so the taxes of course had 
been low. 

With the breaking out of the war, the ex- 
penses were all at once increased ; soldiers 

2 were wanted, — first 75,000, then 500,000, and 
at last 1,000,000. The soldiers must be paid ; 
and their food and clothes, guns, swords, bayo- 
nets, powder and shot, together with the horses, 
wagons, cannon, forts, and ships, all the mate- 
rial necessary to carry on a war, must be paid 
for. How to raise the large sum of money 
needed, amounting to many millions of dollars, 
was a hard question for the Secretary of the 
Treasury to answer. 

The taxes were increased at once ; but there 

3 was not time to raise all the money wanted in 



WHAT ARE GREENBACKS ? 45 

that way, and, besides, it would have been 
unwise to put suddenly upon the people so 
heavy a burden. Some other way must be 
found to raise money speedily. At last, 
though somewhat doubtful of the wisdom of 
the plan, the Secretary of the Treasury, with 
the consent of Congress, determined to issue 4 
paper money. He had many thousand pieces 
of paper manufactured of a peculiar kind. On 
one side of each piece, called the face, he had 
the following words printed : " The United 
States will pay the Bearer one dollar," or 
two, or five, or ten, or fifty dollars, or whatever 
sum the paper was to stand for • on the other 
side, or the back, he had printed, 1 " This Note 
is a Legal Tender at its face value for all 
Debts, Public and Private, except Duties on 
Imports and Interest on the Public Debt;" 
and also a warning that it was against the law 
for any person to counterfeit (or imitate) this 
paper money. If any of you will examine a 
dollar-bill (greenback), you will see these things 

1 Let the teacher explain the meaning of the words 
printed on the greenback ; and, by having one at hand to 
show the children, explaining the signatures and numbers, 
and telling the precautions taken against counterfeiting, the 
advantages of an object lesson will be secured. 



46 LESSONS ON PRACTICAL SUBJECTS. 

5 printed on the face and back. When this paper 
dollar was worn out, the owner had the right to 
exchange it for a fresh one at the treasury, and 
the worn-out paper dollar was destroyed. 

These paper dollars were called "green- 
backs," because of the color of the backs. 
Now you understand, from what we have said 

6 about paper money, that these greenbacks have 
no value in themselves. But, though it simply 
says on the greenback, that " The Government 
will pay the Bearer One Dollar," yet the peo- 
ple felt that the dollar to be paid was to be 
either gold or silver. You can easily see that 
there would have been no advantage in ex- 
changing one paper dollar for another; and 
these words seem to prove that the govern- 
ment did not regard the greenbacks as real 
dollars, but only as pieces of paper that repre- 
sented dollars, and served in the place of them. 
The people felt that some time the government 
would pay coin for the greenbacks, and it was 

7 this confidence of the people in the United States 
government that gave the greenbacks what value 
they had. As this feeling of confidence changed, 
and became greater or less, the value of the 
greenbacks changed too, as we will explain by 
and by. 



WHAT AEE GREENBACKS ? 47 

This paper money was used by the govern- 
ment to pay the soldiers, and for the other ex- 
penses of the war, and in that way came to be 
used by everybody in place of gold and silver. 

When a government obliges its people to 
receive paper money for their goods, the gov- 
ernment really runs in debt to the people for 
these goods. For example: In the war, our 
people owned the goods (guns, ammunition, 
etc.), and wanted to sell them; the government 
absolutely needed the goods, and had no other 
money to pay for them than these greenbacks. 
So the people had to take them in payment for 
their manufactures. They were ready to do 
this because they believed the government i 
would some clay give gold and silver for this 
paper money. Thus, you see, the government 
really borrowed all these goods of the people, 
and borrowed the services of the soldiers and 
sailors. The greenbacks were understood to 
be the government's promises that some day it 
would pay for all their goods and services in 
coin. 

Those who first sold their goods to the gov- 
ernment received, as we have said, these green- 
backs in exchange for them. When these 
people in turn wanted to buy clothes, food, etc., 



48 LESSONS ON PRACTICAL SUBJECTS. 

they generally had no gold or silver, so they 
paid for the goods with greenbacks. It is 
printed on the greenbacks that this paper 
shall be accepted "for all Debts, Public and 
Private " ; so those who sold grain and cloth- 
ing could not refuse to take greenbacks in 
payment. Thus, this paper money came grad- 
ually to be used by every one. But though 
these papers passed from hand to hand, they 
still bore the promise to pay dollars, and 
whoever held, or now holds, such paper 
should have a right to claim gold and silver 
for it. 

Very soon this paper money began to 
grow less in value, or depreciate, 1 as we say. 
Notwithstanding that the United States gov- 
ernment had declared that these pieces of 
paper should pass for dollars, one dollar in 
paper money would not buy as much as 
one gold dollar. Why was this ? It was 

10 because the government had made no pro- 
vision to pay coin in the future, and was 

11 issuing more and more paper money. The 
people knew this because the Secretary is 
obliged by law to publish reports from time 
to time, telling how much coin is in the 

1 Let the children look out the derivation of this word. 



WHAT AEE GREENBACKS ? 49 

treasiny. 1 Another reason why the paper 
money decreased in value was that the armies 12 
of the North were at this time often defeated 
in battle. Timid persons began to fear that the 
North might not succeed in the war, and that, 13 
if it did not, the paper money could never be 
redeemed. So little coin remained in the treas- 
ury, that the greater the amount of paper money 
issued, the less likely was it to be redeemed. So 
people were not so willing to take the green- 14 
backs as they had been, and therefore the paper 
grew less and less in value. At one time people 
said gold stood at $2.80. What did that mean ? 
It meant that it took $2.80 in greenbacks to 15 
equal one dollar in gold, or to buy what one 
gold dollar would buy. But after this, the Un- 
ion armies were more successful, and finally 
conquered. As people gained confidence that 16 
the government would redeem their paper with 
gold, greenbacks became more valuable ; that 
is, a greenback dollar would buy nearly as 
much as a gold dollar, and at last quite as 
much. As people say, the paper was at pari; 
with gold ; which means, that you can readily 

1 " The Old Farmer's Almanac " generally tells how much 
coin there is in the treasury at the beginning of the year. 
Let the children look this up. 
4 



50 LESSONS ON PEACTICAL SUBJECTS. 

exchange a greenback dollar for a gold dollar, 
and buy the same amount of goods with each. 

From all this, you will see that it is not 
enough for a government to he understood to 
promise that a gold dollar will be given for a 
18 paper dollar. A government must provide for 
keeping its promise, so that the people can feel 
sure that the promise will be kept, before they 
will give a gold dollar's worth of goods for a 
paper dollar. 



Questions on Chapter V. 

L When the Rebellion of 1861 broke out, was there 
much or little coin in the treasury ? 

2. Why was more money needed to carry on the war ? 

3. How was the first extra money raised ? 

4. The taxes did not bring in money quickly enough, 
so what plan did the Secretary of the Treasury decide 
upon ? 

5. Describe a "greenback," and tell why it is so 
called, and what is printed on it. 

6. Were these greenbacks in themselves valuable 1 

7. What then made them valuable ? 

8. Tell how the greenbacks came gradually to be 
used by every one. 

9. Why were the people willing to take this paper 
money in exchange for their manufactures ? 

10. After a time the paper dollars began to grow 
less in value : what was one cause of this ? 



WHAT AEE GREENBACKS ? 51 

11. How did the people know whether there was 
much or little coin in the treasury ? 

12. Give another reason why greenbacks grew less 
in value. 

13. What made the people fear the paper money 
might never be redeemed 1 

14. How did this make them feel about using the 
greenbacks ? 

15. At one time gold stood at $2.80. What does that 
mean 1 

16. When the Union armies were successful, and 
the people gained confidence that the government 
would stand, what was the effect on the value of the 
paper money ? 

17. What does "at par" mean? Are gold and 
paper "at par" now? 

18. Is it enough, in order to make a paper dollar 
equal in value to a gold one, that a government should 
be understood to promise that a gold dollar will be given 
for every paper one ? 



52 LESSONS ON PRACTICAL SUBJECTS. 



CHAPTER VI 

WHAT IS IRREDEEMABLE PAPER MONEY? AND 
WHAT ARE BLUEBACKS? 

"\7"OU remember that the Secretary of the 
•*■ Treasury was doubtful about the wisdom 
of his plan of forcing the people to use paper 
money. He thought there was no other way 
of raising money at that time. Other, and per- 
haps wiser, men differed from him, but we can- 
not discuss the matter here. That all the mis- 
chief that might have come from such a use of 
paper money did not come, is due to the fact, 
that the Rebellion was at last put down, and 
confidence in the United States government 
restored. "We will now try to show you why 
there is danger in such an experiment, and also 
what might have happened in the United States, 
by telling you what actually did happen to the 
paper money of the Southern Confederacy, 
l The Confederate government issued paper 
money, just as the Union government issued 
greenbacks, in order to raise money, and, as we 



WHAT IS IRE EDEEM ABLE PAPER MONEY? 53 

have explained, it thus went in debt to its 
people. Its paper dollars had blue backs, just 
as our paper dollars had green backs, and to 
make it simpler we shall therefore call the 
Confederate paper money, bluebacks. As the 
war went on, the Southern armies lost battle 
after battle, and the Southern people began to 
fear that their government would never pay 2 
coin for its bluebacks. 

The blueback dollar grew less and less in 
value, and its buying power steadily decreased. 
A pair of slippers, which one day cost one 
paper dollar, the next day cost two, and the 
next week five. In coin, the value of the 
slippers was just the same, but the blueback 3 
dollar was not worth so much ; its buying 
power had changed, and was changing day by 
day. The reason for this we have explained. 
A great deal of paper money had been issued, 
but no coin had been saved to redeem it, and 4 
none could be saved ; for the people were too 
poor to pay taxes. Their corn, and pork had 
to go to feed the soldiers. They could not 
send any cotton out of their own country to 5 
sell in England and elsewhere, as they had 
done before the war, because now the Northern 
vessels guarded the ports, and would not let 



54 LESSONS ON PRACTICAL SUBJECTS. 

any vessels sail out. As they could not easily 
sell all their cotton and other products, they 
had very little money on hand. Their treasury 
was empty, and there was no way to fill it. It 
became evident at last that the South would be 
defeated. Then the people knew that the blue- 
backs would probably never be redeemed, and 

6 they asked very large sums of blueback money 
for the commonest articles of food or clothing. 

A gentleman living in Eichmond, just before 
it was taken by General Grant, went to an auc- 
tion where he wanted to buy a hogshead of 

7 molasses. How much do you think he had to 
pay for it in blueback dollars? You would 
never guess. It cost him $4,545.37, — which 
would be about $18 per quart. You see he 

8 was no richer then, with $4,545.37, than you 
or I should be now with twenty or thirty dol- 
lars, the price in coin of a hogshead of mo- 
lasses. The man who bought the molasses was 
better off than the one with the $4,000, for he 
had something of real use and value ; while the 
other man had only a quantity of paper money, 
which was growing less in value every day. 
Perhaps the man who sold the molasses was 
willing to take the paper money, because he 
still believed the bluebacks would some time be 



WHAT IS IRREDEEMABLE PAPER MONEY? 55 

redeemed ; but it is more likely, that he took 
them because he thought he could buy with 
them something else, which he wanted more 
than the molasses. 

When, at the close of the war, the Confederate 
government was entirely broken up, and there 
was no chance that its paper money would ever 
be redeemed in coin, the bluebacks became good 9 
for nothing, except for lighting fires.. Those 
people who had sold their goods for bluebacks, 10 
and so had nothing in the world but blueback 
money, were utterly ruined. E"o one would 
take the bluebacks in exchange for groceries, 
or clothes, or food; $1,000 in bluebacks was 
not worth twenty-five cents in coin. 

As it was with the Union and Confederate 
governments, so it is with every nation that 
uses paper money. 

First. If a government issues a quantity of 
paper money and saves gold enough to redeem n 
it, all goes well; as did the plan of the four 
boys, when they gave twenty pieces of paper 
and had twenty apples in reserve. 

Second. If, for any- reason, there is a quan- 
tity of paper money issued, and all the coin 12 
which should be ready to redeem it is spent on 
a war, and no more can be raised by taxes, 



56 LESSONS ON PRACTICAL SUBJECTS. 

then the paper money will be worth nothing ; 
as was the case with the bluebacks of the 
Southern Confederacy. 

Third. If a government is an honest one, 

13 it will consider its paper money a just debt, 
and pay it accordingly ; as the boys did, when 
in the autumn they redeemed their paper prom- 
ises with apples. 

Fourth. If a government issues paper money 

14 when there is but little coin in the treasury, 
and when none is being saved to redeem it 
with, the paper loses part of its value. It 
would be like giving two pieces of paper, each 
promising to pay one apple, and only having 
one apple to pay with ; the owner of each piece 
of paper could then only get half an apple. 

This w 7 as somewhat the case when, in the 
war of the Rebellion, it took two dollars and 
eighty cents in greenbacks to equal in value 
one dollar in gold. You see a paper dollar at 
this time was not equal to a gold dollar, nor 
would it buy a gold dollar's worth of goods. 



Questions on Chapter VI. 

1. What was done by the Confederate government 
to raise money 1 



WHAT IS IRREDEEMABLE PAPER MONEY? 57 

2. As the war went on, what made the value of the 
bluebacks less ? 

3. At one time the price of a pair of slippers was 
$1. What made the price go up to f 5 1 

4. Near the end of the war people began to think 
the Confederate government would never redeem the 
bluebacks. What made them think so ? 

5. The Confederate government now found it hard 
to raise money. Why was this 1 

6. When people feared the bluebacks would not be 
redeemed, how did it affect prices ? 

7. Who can tell about the auction and the hogshead 
of molasses 1 

8. Why would you be as rich to-day with $30 in 
coin, as the man was in 1865 with $4,000 in bluebacks ? 

9. When the Confederate government went to pieces, 
what was the value of the bluebacks ? Why 1 

10. What happened to the people who had nothing 
but blueback money 1 Why ? 

11. When may a government use paper money with 
safety? Illustrate from the four boys. 

12. When will the paper money be worth nothing ? 
Illustrate. 

13. When the government is an honest one, what 
provision will it make to redeem the paper money it 
issues 1 

14. When will the paper money lose part of its 
value 1 Illustrate. 

What word do people use when they mean that paper 
money grows less in value ] 



58 LESSONS ON PRACTICAL SUBJECTS. 



CHAPTEK VII. 

WHAT IS IRREDEEMABLE PAPER MONEY? 

(continued) 

/^"N"E reason why coin is the best measure 
^-^ of all other values is, that its own value 
changes very little. The value of wheat, and 
cotton, and cattle, changes very much from year 
to year, as they are plenty or scarce. Even the 
value of gold changed, when the Australian and 
Californian gold mines were discovered; but 
now it changes less than anything we have. 

Suppose we had to measure goods with a 
yardstick that the shopman could squeeze up 
so that it would not measure a whole yard, 
l He might say to his customer, "See, it is a 
yard measure." But the customer would not 
wish for cloth measured by such a yardstick. 
The shopman would like it no better, if the 
customer seized the measure, and stretched it 
more than a yard, and insisted that it was the 
same yardstick, and that this was the way to 



WHAT IS IRREDEEMABLE PAPER MONEY? 59 

measure a yard. No, the yard measure must 
always be of the same length in order to satisfy 
everybody. Just as a standard yardstick always 
measures the same length of cloth, so the gold 2 
dollar always buys about the same amount of 
goods from year to year. 

When people are sure that a paper dollar 
can be redeemed in coin at any time they wish, 3 
it will buy the same amount of goods as a gold 
dollar._ But, as we have seen, when there is no 
coin with which to redeem it, paper money 4 
changes its value very much from day to day ; 
and in that case, it is an unsafe measure of 
value, or, as we say, an unsafe money. 

There are people who still believe that ir- 
redeemable paper money is as good as gold 
money; who do not want the government to 
redeem the greenbacks with coin; and who 
would like to see the government issue a large 
quantity of paper money without promising to 
redeem it, or preparing to do so. If people who 
wish for that kind of money had their way, there 
would be no need to print any promise on the 
face of the paper dollars ; nor to make any 
provision of coin to redeem them with. The 
government would simply print on this paper, 
"This is a dollar." We should then have a 



60 LESSONS ON PE ACTIO AL SUBJECTS. 

5 money which could be increased in quantity 
at the pleasure of every Congress; which, 
having no value in itself (and without even 
the value of a promise), would be as worth- 
less as the Confederate bluebacks at the end of 
the war, or the paper money of the Chinese 
Emperor. Printing on the paper, "This is a 
dollar," would not give the paper any real 

6 value ; it would have no buying power, and 
a man would be no richer with $1,000 of it 
than he would be without. Such irredeemable 

7 paper money would be no better than gravel, 
which is easy to get, and worthless when got ; 
and when all the people had filled their pockets 
with it, they would find that no one would 
take such cheap money in exchange for food or 
clothing. 

The lesson to be learned from the history of 
paper money, in the United States and else- 

8 where, is never to believe in so-called cheap money. 
The question is not, "How much money does 
a man earn in a day ? " but, " How much food 
and clothing can he get for this money ? " 

9 If one gold dollar will buy as much as two 
paper ones, it is clear that he who earns one 
gold dollar is as well off as he who earns two 
paper dollars. The second man seems to get 



WHAT IS IREEDEEMABLE PAPER MONEY? 61 

more money; but the two paper dollars will 
not buy any more bread, or any more coaL, or 
any more clothes, than the one gold dollar. 

At the present time, gold and greenbacks can 
readily be exchanged for each other ; or, as we 10 
say, they are at par. 1 

The buying power of the paper is now equal 
to that of the gold, because the credit of our 
government is good; that is, people believe that 
it will, in the course of time, pay its just debts 
to the people. We must also bear in mind, 
that the greenbacks are the proofs of the debt 
which the government of the United States 
owes to the people. 



Questions on Chapter VII. 

1. "Would an elastic yardstick be a bad measure of 
cloth? Why? 

2. Why does a gold dollar resemble a standard yard- 
stick more nearly than a paper dollar ? 

3. When may paper money be a safe measure of 
value ? 

4. When is paper money an unsafe measure of value 'I 

1 Ask if the children remember what "at par" means. 
The highest amount of greenbacks out at any one time was 
(January, 1864) $449,338,902. The amount outstanding in 
April, 1884, was §346,681,016. 



b^ LESSONS ON PllACTICAL SUBJECTS. 

5. Some people think that a good money could be 
made by printing on paper, " This is a Dollar," and so 
having a paper money that could not be redeemed. 
Would it be a good kind of money to have? Why 
not? 

6. Would it give the paper money any value to 
print on it, " This is a Dollar " ? 

7. Name some article that would make as good a 
money as this irredeemable money. 

8. What is the lesson to be learned from the history 
of paper money ? 

9. When a gold dollar buys as much as two paper 
ones, who is the richer, a man who earns two paper 
dollars, or a man who earns one gold dollar ? 

10. When a gold dollar and a paper dollar can read- 
ily be exchanged for each other, what do people say of 
them? 



WHAT AKE UNITED STATES BONDS ? 63 



CHAPTER VIII. 

WHAT ARE UNITED STATES BONDS ? 

WE have seen that the Secretary of the 
Treasury raised large sums of money 
for the expenses of the war by issuing paper 
money, and that it was an indirect way of 
borrowing money from the people. 

It was soon found that, notwithstanding the 
heavy taxes and the large quantity of paper 
money issued, more money was needed to carry 
on the Avar. It was thought unwise to issue 
more paper money, so the Secretary saw that 
he must borrow money in some other way. 
The following method was decided on by the 
President and his Cabinet, with the consent of 
Congress. The President proclaimed to the 1 
people, that to every one who would lend the 
government one thousand dollars, the govern- 
ment would give in exchange a piece of paper, 
having on it the promise of the United States 2 
to repay the owner within a given time his 



64 LESSONS ON PRACTICAL SUBJECTS. 

thousand dollars in coin; and until that time 
the government would pay him for the use of 
his money a yearly interest of 7.3 per cent. 1 

3 This piece of paper was called a United States 
Bond. 2 When the government gave this bond 
to a man, and received the one thousand dollars 
for it, the act was called " selling a United 
States bond." 

4 The money thus borrowed was used for car- 
rying on the war, and buying guns, ammuni- 
tion, and other supplies. 

5 The money needed to pay the interest on the 
bonds was raised by increasing the taxes. Be- 

6 sides paying this iuterest, part of the money 
received from the taxes was regularly set aside 
every year for the payment of the bonds them- 

7 selves. The money thus laid aside was called 
" the Sinking Fund." 

Bat, as time went on, the Secretary of the 
Treasury saw that this sinking fund would not 

1 Point out the difference between a greenback and a 
bond ; that the time of the payment of the bond is fixed, and 
there is interest to be paid on it, whereas the greenback 
is understood to be a promise to pay at an indefinite time, 
and there is no interest paid on it ; and also, that both are 
debts that the United States government owes to the people. 

2 Let the children look up the derivation and definition of 
bond. 



WHAT AKE UNITED STATES" BONDS ? 65 

be large enough to pay off the bonds at the 
appointed time, and consequently he must 
raise more money. He might possibly do this 
by increasing the taxes still more ; but that 
would put a very heavy burden on the people, — 
too heavy for them to bear at one time. Still, 
the promise of the government to pay at a cer- 
tain time must be kept; if it were not, no 
one would ever trust the United States govern- 
ment again. So the Secretary borrowed more 8 
money of the people, or, as we say, sold more 
bonds. The money he obtained in this way he 
added to what had been already saved, and with 
it paid the first set of bonds at the appointed 
time. When he sold the second set of bonds, 
however, he found that people felt so sure that 9 
their money would be repaid them at the prom- 
ised time, that they were willing to receive 
only six per cent interest for the use of it. 

You will see, that, as part of the bonds 10 
were paid off by the money saved from the 
taxes, when the government borrowed money 
the second time, it did not have to borrow as 
much as it did the first time. 

It was somewhat as if John's wife weren 
sick, and he must pay the doctor ten dollars. 
John borrows ten dollars from Thomas to pay 
5 



66 LESSONS ON PRACTICAL SUBJECTS. 

the doctor, and gives a paper, or bond, promising 
to pay back the money in three years, and to 
pay seven per cent interest a year in the mean 
time. John pays the interest as it becomes 
due, and saves five dollars in three years, but 

12 cannot manage to put by more. So, when the 
time draws near for him to pay Thomas, he 
goes to William, says he must pay Thomas, and 
asks William to lend him five dollars. William 
sees that John lias paid half his debt, and so 
willingly lends the remaining five dollars ; and 
as the debt is small, and the risk not great, he 
asks only six per cent interest. John gives him 
a paper, or bond, promising to pay the interest 
every year, and all the money in three years. 
John then takes the five dollars, together with 
the five dollars he had saved, and pays his debt 
to Thomas. Every year William shows the 
bond to John, who then pays him thirty cents ; 
and, at the end of three years, the five dollars ; 
so the debt is at last paid entirely. 

3 3 This is somewhat the way in which the 
United States is paying its debt, only it pays 
it more slowly. Each time it borrowed money, 
it needed less, because part of the debt was paid 
by the sinking fund, and so only part had to be 
paid by borrowing more money. 



WHAT AEE UNITED STATES BONDS ? 67 

In the same way, when the time approached 14 
for the payment of the six per cent, bonds, 
part of the money was raised by taxes, and 
part by selling new bonds. The credit 1 of 
the government was now so good, — that is, 
the people felt so confident of the power of the 
government to pay its debts, — that they were 
willing to lend it money at five per cent inter- 
est ; when these bonds were paid, people lent 
money to the United States government for 
four per cent interest ; and at last for three 15 
per cent interest. 

As w^e have said, the money borrowed by 
the sale of each new issue of bonds is always 
used, with the money saved from taxes, to pay 
back the money borrowed by the last issue. 

As the money to pay the principal 2 and 
interest of the bonds is raised by a tax on the 
whole people, every time a set of bonds is paid 16 
by the sinking fund, the taxes are lessened by 
the amount of those bonds and their yearly 
interest. Also, as each new set of bonds pays 
less interest than the old bonds, the taxes are 17 
further lessened by the difference in the interest. 
For example, the first regular bonds, issued in 

1 Heave the children look up the derivation of credit. 

2 Have the children look up the derivation of principal. 



68 LESSONS ON PRACTICAL SUBJECTS. 

1861, paid 7.3 per cent interest ; the bonds is- 
sued in 1882 pay three per cent interest ; con- 
sequently, since the first issue of bonds, the 
interest has been reduced on part of the debt 
4.3 per cent, 1 or more than half. 

As each set of bonds was paid, people felt 
more and more sure that money invested in 
United States bonds was safe : and the feeling 
that their money was secure, made them eager 
to buy the new bonds even at a lower rate of 
interest. 

18 When people speak of the " national debt," 
they mean the money which the government 
owes the people for these bonds. 

19 By wise economy in our government, and 
judicious saving of a part of the revenue, 2 
we hope to be able finally to pay off all these 
bonds, and so to remove entirely the burden 
from the people. In the mean time, the own- 
ers of these bonds, many of whom are women 
and orphans, feel that in lending to the United 

1 Let the scholars here calculate the yearly interest at 7.3 
per cent on $300,000,000, and the interest at 3$ per cent on 
the sams amount ; then, by deducting the one from the 
other, they will get some idea of how much taxes can be re- 
duced by such a reduction of the rate of interest paid on the 
bonds. 

2 Have revenue defined by some of the class. 



WHAT ARE UNITED STATES BONDS ? 69 

States government they are lending to an hon- 
est borrower, and rest secure in the trust that 
all their money will be repaid them at the ap- 
pointed time. 



Questions on Chapter VIIL 

1. Later on in the war, as more money was needed, 
another plan was tried : what was the President's procla- 
mation to the people ? 

2. What did the government promise to pay for the 
use of every $1,000 that it borrowed? 

3. What were these papers called? What does 
" selling a bond " mean ? 

4. What was this borrowed money used for ? 

5. How was the money raised to pay the promised 
7.3 per cent interest? 

6. All the money thus raised was not spent in 
paying interest : what was done with part of it ? 

7. What was this saved up money called ? 

8. When the time for paying back the bonds drew 
near, it was seen that this sinking fund would not be 
large enough : what was then done ? 

9. Why were people ready to buy the new bonds at 
a lower rate of interest ? 

10. Why did the government have to borrow less 
money the second time it issued bonds than it did the 
first time 1 

11. Explain how John paid his debt to the doctor. 

12. Explain how John paid his debt to Thomas. 



70 LESSONS ON PRACTICAL SUBJECTS. 

13. Was John's debt in any way like the United 
States debt ? Why ? 

14. When the time for the payment of the six per 
cent bonds drew near, how was the money raised to pay 
them 1 

15. What is the interest paid now on part of the 
bonds ? 

16. Why does the payment of bonds make the taxes 
less? 

17. What effect does the reduction of interest on the 
bonds have on the taxes ? Why ? 

18. When people speak of these bonds, what do they 
often call them % Why ? 

19. How do we expect to pay back all of this debt ? 



WHAT IS A TAX ? 71 



CHAPTEE IX. 

WHAT IS A TAX? 

T3R0BABLY all of you have beard older 
**- people speak of taxes, tax-bills, and tax- 
payers. You have beard people say, " The taxes 
are low in that town," " He pays very large 
taxes," and use otber sucb expressions. But 
bow many of you know just wbat a tax is, and 
what it is for ? Very likely you have heard 
taxes spoken of as something very burdensome 
and disagreeable; why should it be necessary 
to pay out money in that way ? 

We will try to explain the matter to you by 
the following story. 

Suppose that two boys had a number of l 
marbles and a top, and one girl bad a hoop. 
They were afraid that while they were in 
school some bad boys were going to play tru- 
ant, and try to steal these things. The three 
therefore put their heads together, and went to 
an older brother, and one of them said, " If you 



"72 LESSONS ON PRACTICAL SUBJECTS. 

will watch our things while we are at school, 
we will pay you. George owns a top, Jane 
owns a hoop, and I own fifty marbles ; now 
George will give you one marble, I will give 
you two (for I have more things to be taken 
care of), and, as Jane has no marbles, she will 
give you a jew's-harp to pay you." So, you see, 
each paid a proportion out of his or her posses- m 
sions, for the care of his or her property. 

Now, suppose they had said, the top is worth 
five cents, the marbles ten cents, and the hoop 
ten cents, and had paid, instead of marbles and 
a jew's-harp, a certain proportion of their value, 
say one fifth (which would be one cent out of 
2 five, and two out of ten). This would be pay- 
ing the elder brother a return for the work he 
did for them, in protecting the top and marbles. 
It is for the same reason that people pay taxes 
to a government. 

So a tax is money which people pay to their 
government for work which it does for them, 
and the protection it gives their lives and prop- 
erty. Let us see what a government is, and what 
this work is. In the United States, when people 
have collected together in a town, they want 
schools and, roads, a town-house, policemen, 
and perhaps lighted streets and a fire-engine. 



WHAT IS A TAX ? 73 

Every year they choose several of their best 3 
men to look after the general work of the 
town, and these are called the Selectmen (be- 
cause they are selected, or chosen to govern 
the town) ; others are chosen to take care of 
the roads ; others, to look after the schools ; 
and so on. These men are authorized to 
spend money for town purposes, and are paid 
for the work they do. The rest of the people 
agree to pay out of their earnings whatever 
sum is needed for all these expenses. Every 
year the selectmen find out how much money 4 
the town wants to spend, and then divide the 
whole expense among the people, each person 
paying his or her share of the taxes. The ad- 5 
vantage of this plan is, that a few of the people 
agree to do the town work, and the rest can look 
after their farms, or trades, or other occupations. 
In the United States a plan very much like this 
is carried out in the business of our cities, states, 
and nation ; and when we speak of the govern- 
ment of a city, state, or nation, we mean those 
men and women whom the people choose to do 6 
such work for them. 

In the first place, the government says to the 
people, "I will keep you and your children, 7 
your land, your houses, and all your property 



74 LESSONS ON PRACTICAL SUBJECTS. 

safe, so far as I can. You shall each pay 
me a tax of so much money, and out of the 
sum of what you all pay me, I will pay the 
officers who are to make your laws, and those 
who are to carry them out and enforce them, 
the judges, policemen, sheriffs, constables, and 
all other officers who may be necessary for the 
protection of yourselves and your property. 
No one shall steal without the risk of being 
shut up in prison ; no one shall kill another 
without danger of being hanged." 

Then the government also protects us against 
foreign nations. It takes care of us and of our 
property when we are away from home, or in 
foreign countries ; it protects our ships on the 
sea, and our commerce in distant lands. In 
time of war, great armies and navies are neces- 
sary for this purpose ; and at all times, to carry 
out the laws, many men are needed, who must 
be clothed, fed, and paid for their trouble. 

Besides this protection, there are certain 
public conveniences which we pay the govern- 
ment to provide us with, such as roads, bridges, 
prisons, schools, etc. 

All this work that is done by the government 
costs a great deal of money. Now, where does 
this money come from ? As we have said, from 
taxes paid by the people to the government. 



WHAT IS A TAX ? 75 

There are several ways in which a govern- 
ment can raise money by taxation. People 
who import foreign goods into this country 
have to pay a tax to the government, and there 
are certain home manufactures, like whiskey 
and tobacco, on which the manufacturers are 
obliged to pay a tax to the United States gov- 
ernment. To-day we will only talk about the 
simplest form of taxation, i. e. what is called 
a property tax. The people elect a man, called 
an appraiser, or assessor, who assesses, or values, 9 
a horse, or a farm, or a house, or a ship, at about 
the price he thinks it would bring in the mar- 
ket, and so on with whatever property a man 
owns. Then the man pays a certain proportion 10 
of the whole value of his property, or a tax, to 
the government. The amount of this tax varies 
according to the expenses of the government. 
In war time, the expenses are heavy and taxes 11 
are high ; in time of peace, expenses are lighter 
and the taxes are generally low T er. 

When the rate of taxation is two per cent, 12 
that means that every man is taxed two dol- 
lars on every hundred dollars' worth of prop- 
erty he owns. If a man owns a farm worth 
$500 and a barn worth $500, he will have to 
pay $20 in taxes. Instead of saying two per 



76 LESSONS ON PRACTICAL SUBJECTS. 

cent, people often say that the rate is $20 on 
a thousand. 

13 Some people have no property to be taken 
care of, but they themselves are protected by 
the government, and in Massachusetts they 
must pay for this care a poll-tax, 1 amounting 
to $2 a year, which must be paid before they 
are allowed to vote. In other states the law 
varies. 

h In the United States, there are four kinds of 
taxes to be paid for different purposes ; namely, 
the town or city, county, state, and national 
taxes. 

15 1st. There are the town taxes. This money 
is paid by the people to the town officers whom 
they have elected, and is used to keep the 
town roads and bridges in good order, to sup- 
port the poorhouse, to pay the selectmen and 
constables, to build public schoolhouses, and 
pay the teachers. 

In cities, instead of the town tax, there is 

16 a municipal, or city tax. These taxes are 
generally much higher than those which the 

17 country people have to pay. In the country 
each man has his own well, lets the moon and 
stars light his roads by night, and the wind 

1 Let the teacher explain the meaning of poll-tax. 



WHAT IS A TAX ? 77 

sweep them. But in the city, water must be 
brought long distances in pipes for the use of 
the people. The streets must be lighted, paved, 
and kept clean. Then there are apt to be many 
bad people in large cities, and for this reason 
a large number of policemen are necessary to 
keep order and protect property. To see that 
all this work is done is the business of the 
city government, and, as it costs much money, 
people must pay large taxes. 

2d. There is the county tax. There is ais 
county court-house; a county jail must be 
built; the county judges, sheriffs, clerk, and 
other officers, must be paid. The county pris- 
oners must be fed; a county poorhouse must 
be supported, and county roads kept in repair. 
The money for these purposes is raised by a 
county tax. 

3d. There is the state tax. The expenses 19 
of the state government are for the salaries 
of the governor and other state officers, the 
senators and representatives in the state legisla- 
ture, who make the state laws by which we are 
all governed ; then there are judges and other 
officers, who, in the state courts, decide dis- 
putes between men, and try criminals for their 
offences against the laws. These men must all 



78 LESSONS ON PRACTICAL SUBJECTS. 

be paid. Then there are state prisons, lunatic 
asylums, hospitals, and more state charities 
than we can name. For all these we pay state 
taxes. 

4th. There is the tax to the United States 
government, or the national tax. 

20 Our President — who must see that the United 
States laws are carried out, who must direct the 
nation in time of war, who must appoint all our 
national officers, who must often work night and 
day for the good of the country— must be paid. 

21 Our national representatives and senators, 
whom the people choose to make the laws of 
this great country, must be paid ; the army and 
the navy must be paid, that we may be safe in 
time of war, and that our ships may be protected 
on the ocean. 

Our consuls, revenue officers, postmasters, and 
the men who collect the taxes, must be paid. 

All these men work for the government/and 
therefore work for the people, and they must 
be paid by the people's money. 

All these expenses are met by the national 

22 tax on all the people. But, instead of paying 

the money directly to the government, as we do 

in state and town taxes, the people pay the tax 

through duties on imported goods and certain 



WHAT IS A TAX ? 79 

articles manufactured at home, such as tobacco, 
whiskey, etc. ; that is, the manufacturers and 
importers pay a direct tax to the government, 
and must then repay themselves by asking a 
higher price for the articles they sell. 

So we see that taxes are money which we 23 
pay to support the government chosen by the 
people, and is for actual work done for us. 
Therefore, when taxes are needed to pay for 24 
the protection of our lives and property, and 
for the many conveniences we have named, 
people are wrong in speaking of them as if they 
were unnecessary, or burdensome, unless indeed 
the public money is wasted; which waste the 
whole people have a right to protest against 
and put a stop to. 



Questions on Chapter IX. 

1. Who can tell the story about the children who 
wanted their toys watched over ? 

2. Why did the children pay marbles to an elder 
brother ? and why was this like paying a tax ? 

3. Explain how a town has its schools, roads, etc. 
taken care of. 

4. How is all this work paid for 1 

5. What advantage is there in this plan ? 



80 LESSONS ON PRACTICAL SUBJECTS. 

6. What, then, is meant by the government of a city 
or state ? 

7. Tell what protection the government gives to our 
persons and our property. 

8. Tell what some of the public conveniences are 
which we have in return for the taxes we pay. 

9. What is the man called who values the property ? 
What work does he do? 

10. To do all this work costs a great deal of money, 
and part of the money is raised by a property tax : 
what is that? 

11. Why are taxes high in time of war, and lower in 
time of peace ? 

12. When the rate of taxation is two per cent, what 
does it mean ? and what tax must a man pay whose 
property is worth $1,000 ? 

13. What is a poll-tax ? Why so called ? 

14. Name the different kinds of taxes in the United 
States. 

15. What is the town tax for ? 

16. What is the city tax for? 

17. Which is the heavier tax ? Why ? 

18. What is the county tax for? 

19. What is the state tax for? 

20. What is the national tax for ? 

21. What work do the senators and representatives 
do? 

22. How is the national tax paid to the government ? 

23. What is a tax ? 

24. Should we be ready to pay our taxes, or not ? 
Let the children find out the rates of town, county, 

and state taxes for the last year. 



HIGH AND LOW TAXES. 81 



CHAPTER X. 

HIGH AND LOW TAXES. 

"VX 7"E know that taxes are the money which 
* * is paid to support a government. If the 
people want a great many conveniences and the 
government has to spend a great deal of money 
for them, the taxes will be high ; and whatever 
increases the expenses makes the taxes higher. 
So the people who pay taxes are interested in 
seeing what the government money is spent 
for. 

These government expenses may be wise and 
necessary, or they may be unwise and unneces- 
sary. Sometimes a foolish war makes a nation 
pay heavy taxes for many years ; sometimes dis- 
honest officers steal public money; sometimes 
they spend it on public works and buildings 
that are not needed. But whatever it is that 
makes the government expenses heavy, it is 
the people who must pay them in the form 
of taxes. 

6 



82 LESSONS ON PRACTICAL SUBJECTS. 

Perhaps we can see this most plainly in the 
town taxes, which are the simplest and most 
familiar If the affairs of a town are badly 
managed, its money spent foolishly, and its 
taxes made very high, all the inhabitants of the 

town feel it. 

It sometimes happens that some work is pro- 
posed which is not very necessary, but which 
the workmen think will give them steady work, 
and to pay for which the taxes will have to be 

increased, 
i Suppose a town has undertaken some such 
useless work, for instance the building of a new 
hio-hroad where it is not especially needed ; and 
that many laborers will be employed on it. 

2 The laborer thinks it will be a chance to get 
crood wages, and that the heavy taxes will not 

3 come on him, but on those who own land, and 
houses, and other property. So he votes to 
have the work done. 

See the effect. First, the taxes are raised to 
meet the new expense ; now, though a town 
may have in it a few rich men who pay heavy 
taxes, by far the larger number of tax-payers are 
generally men of moderate means, who, by in- 
dustry and economy, have saved enough money 
to own their houses and land; and the heavier 



HIGH AND LOW TAXES. 83 

tax comes very hard on these men. But the 4 
laborer, who only pays a poll-tax, also feels the 
heavier taxes. He had thought that they would 
have to be paid by his landlord, and so they are ; 
but the landlord, in order to get the money he 
needs, raises his rent. So the laborer pays part 
of the tax in the form of rent to his landlord. 

Then the butcher, if he owns his house and 5 
shop, has to pay higher taxes on them ; if he 
hires them, his rents are raised by his land- 
lord. In either case, to earn his living he must 
charge more for his meat. The case is the same 
with the grocer, who raises the price of groceries, 
and with the blacksmith, and other tradesmen. 

It is just so with the mill-owner; he must 
pay such large taxes to the town, that, to make 
his profit and support his family, he must raise 
the price of his calico and cotton. 

Now, here is the laborer, who perhaps re- 
ceives a little more pay for his public work than 
he would get from other employment, obliged 
to pay higher rent, and higher prices for his 
food and clothing. So he, as much as any 
of his townsmen, and perhaps more, feels the 
burden of heavy taxes. Thus we see that it is 
not a few, but all of the people, who must bear 
this burden. 



84 LESSONS ON PRACTICAL SUBJECTS. 

Senator Edmunds says : " You all pay taxes, 
whether the tax-gatherer comes to you with a 
bill, or not. He goes to your employer, and 
your employer pays you just so much the less, 
because he has to pay those taxes. You all 
wear clothes and drink tea, and you pay taxes 
on those. Every human being who earns his 
own living, who eats, wears clothes, and sleeps 
under a roof, pays taxes, whether he knows it 
or not." 

As was said before, in towns the people vote 
every year who shall be the town officers, and 
how money shall be spent ; but the legislature 
with the governor decides how the state taxes 
shall be expended. Now, if the sensible and 
intelligent people of the state go to the town 
meetings and the city ward-meetings and vote, 
the towns and states will have good officers, 
the work will be well done, and the money 
r properly used. But if people pay no atten- 
tion to the town meetings, and do not go to 
them and vote, dishonest and ignorant people 
will govern the town, the work will be badly 
clone, and the taxes dishonestly and foolishly 
spent. 



HIGH AND LOW TAXES. 85 



Questions on Chapter X. 

1. Suppose a town has undertaken an expensive and 
unwise piece of work : what will be the effect on the 
taxes ? 

2. Why is the laborer likely to vote for it 1 

3. Who does he think will have to pay the taxes 1 

4. Does he find he was right in thinking he would 
not feel the heavier tax ? How does the heavier tax 
affect him 1 

5. Why does the butcher raise his prices 1 The grocer 1 

6. What does Senator Edmunds say about taxes ? 

7. If sensible people are careless about going to vote, 
how will the taxes probably be spent 1 



86 LESSONS ON PRACTICAL SUBJECTS. 



CHAPTER XI. 

HIGH and low taxes. — (continued.) 

TT is not only in building unnecessary public 
-*- works that money may be misspent, and 
the higher taxes bring trouble on the people 
of a town. 

If, through mistaken kindheartedness, able- 
bodied paupers are supported by the town, they 
are really in part supported by the laborers 
and workingmen, because each pauper that is 
fed and clothed at the public expense in- 
creases the taxes by just the price of his food 
and clothing. There are some men and women 
who are indolent, shiftless, and lazy; if these 
are kept in comfort at public expense, others 
may follow so bad an example, and a pauper 
class be formed to eat up, like a flight of locusts, 
the earnings of those who work. 

As an illustration of this, we will tell you 
about the high taxes that were paid in England 
for the support of the poor. 



HIGH AND LOW TAXES. 87 

111 the year 1834, and for many years "be- 
fore, there were very high taxes all through 
England, and one of the most burdensome was 
a tax called the poor-rate, which was paid to l 
support the poor. There were certain towns 
where the parish, or as we should say the town, 
provided for all people who said they could not 
find work. Any man might come to the over- 
seer of the poor, and by simply saying that he 
could not get anything to do, he and his family 2 
were allowed to have a very small house rent 
free, were given a certain number of shillings a 
week, and as many loaves of bread a week as 
there were children in the family ; little or no 
work was exacted by the parish in return for 
this money. Few inquiries were made as to 
whether the man had really tried to find work ; 
his word was taken as sufficient proof that he 
had. It was not strange that more and more 
people came to claim the parish aid, all saying 
that they could not find work. 

The money to pay for the houses and bread, 
and the shillings, came out of the poor-rate, 
which was paid by all the people who held 3 
property in the parish. Most of these were 
thrifty tradespeople, or farmers who owned or 
hired the farms they lived on, and employed 



88 LESSONS ON PRACTICAL SUBJECTS. 

4 many laborers. The employers of labor com- 
plained that the poor-rates were growing heavier 
and heavier. They said that often they could 
barely make two ends meet, and could not save 
a penny against a rainy day. At last a com- 
mission was appointed by the government to 
try to find out the cause of all this trouble. 

In answer to the commissioners' inquiries, 

5 the farmers and other tax-payers said : " We 
who have owned farms and other taxable prop- 
erty, have paid the taxes and done all the work, 
and in this way have supported many men and 
women who did next to nothing. Our taxes are 
growing heavier, our profits smaller; and be- 
sides, we do no real good by supporting so many 

6 paupers. They lose self-respect by accepting 
parish aid, and are the most worthless of our 
people ; and as they get money without hard 
work, they are careless in spending it, and are 
always in want. This state of things must 
not be." 

The commissioners made such a report that 
the poor law was changed, and was afterwards 
somewhat as follows. 

7 The new law provided that, — 1st. All the 
old and sick, who had no one to support them, 
should be placed in a poorhouse. 2d. After this 



HIGH AND LOW TAXES. 89 

time, all those who applied to the overseer of 
the poor saying they could find nothing to do, 
were to be answered by the overseer as follows: 
" Here is hard work ; you can break stones, or 8 
dig ditches ; but because the parish wants you 
to find work for yourselves, you shall be paid 9 
less by the parish than the farmers and other 
employers of labor would give you." 

This law was carried into effect. See the 
result. The poor-rates were still paid; but in 
return for the money thus spent a reasonable 
amount of work was exacted. The paupers 10 
soon discovered that it paid better to work for 
the farmers and tradesmen than for the parish. 
Each man who gave up working for the parish 
lessened the poor-rates, and now helped to pro- 
duce food as well as eat it. The farmers and 11 
other owners of property had smaller taxes to 
pay, and, since there were more laborers ready 
to work for them, they could produce more 
from their farms. t Food, being more plenty, was 12 
cheaper. The laborers could buy more for less 
money. The result was that most of the able- 
bodied men of the parish could find work in the 
neighborhood, and the poor-rates were needed 
chiefly for the support of the sick and aged who 
were friendless. 



90 LESSONS ON PRACTICAL SUBJECTS. 

To sum up these two chapters, we will add, 
that, first, if an expensive public work be un- 
dertaken, to pay for which butchers, farmers, 
and all tradesmen must be heavily taxed, it 
makes little difference whether a man owns 
property or not, the burden is shared by all ; 
and secondly, when able-bodied men and women 
are supported by a town, taxes have to be 

13 raised, and such people soon become paupers, 
who eat the bread earned by hard-working 
men, as in the English parish spoken of above. 
Of course there are always aged, crippled, and 
helpless people who are friendless, and to care 
for them is the duty of the town. 

Certain public works too are necessary, or 
of the utmost importance, such as schools, 
and works relating to health; and the money 
thus spent is well invested, and should not be 

14 grudged by anybody. Every one can take 
the pains to find out for himself whether it 
will be wise to undertake a proposed work 
or not, and it is for every man's interest to do 
so, and by voting accordingly to make sure 
that the taxes are well spent. 



HIGH AND LOW TAXES. 91 



Questions on Chapter XI. 

1. At one time in England taxes were very heavy. 
What was one of these taxes called, and for what was it 
paid ? 

2. What did the overseer of the poor know about 
these people, and what did he do for them ? 

3. Who paid the taxes which supported these pau- 
pers? 

4. What complaint did these farmers and trades- 
people make ? 

5. When commissioners were sent to find out the 
cause of the trouble, what did the farmers and trades- 
people tell them ? 

6. What did the farmers say was the effect on the 
paupers of being supported by other people ? 

7. What did the new law decide should be done with 
the old and sick who were friendless ? 

8. What was to be done with any other people who 
apx^lied to the overseers of the poor for help ? 

9. Why were these people to get low pay for their 
work ? 

10. What effect did the new law have on the paupers ? 

11. What effect did the new law have on the taxes? 
Why? 

12. Why did the lower taxes make food cheaper ? 

13. Is it right that men and women who are strong 
and well should be in a town poorhouse ? Why not ? 

14. What have you learned that voters can do in order 
to have the money they pay in taxes well spent ? 



92 LESSONS ON PRACTICAL SUBJECTS. 



CHAPTER XII. 

WHAT IS A CORPORATION ? — MILLS. 

I WONDER how many children here know 
how large enterprises, such as mills, fac- 
tories, railroads, and steamship companies, are 
generally started and carried on ? You chil- 
dren probably do not realize how large a sum 
of money is needed to put up great buildings, 
lay railroad tracks, build cars and engines and 
steamboats, and buy materials. It is very sel- 
dom, that one man has enough money to start 
such concerns alone, and the money is generally 
raised by subscription, a number of men putting 
their money together. 

We will try to tell you how one of these large 
enterprises is managed ; how a mill, for instance, 
is built and carried on. 

Let us fancy a large town situated on the 

banks of a good river, with plenty of people 

there ready to work. Then suppose that a 

number of active, enterprising men agree to 

1 start a cotton mill. First of all, they try to 



WHAT IS A CORPORATION? — MILLS. 93 

find out how much money will be needed 
to buy the land and the right to use the water, 
to put up the buildings, and to put in the ma- 
chinery; also to pay the taxes and insurance, 
to buy the raw cotton, 1 and pay the workmen 
and the superintendent until the mill shall be 
fairly started, — when it ought to pay for itself. 
All this they find out from practical men, who 
have had experience in the business. 

Then each man subscribes as much money 2 
as he thinks best, and asks his friends to do 
likewise. 

The men subscribing in this way, and joining 
together for such an enterprise, 2 form what is 
called a corporation. 3 They become responsible 3 
for the good management of the business, and 
are obliged to act according to the laws of the 
state in which they work. 

Every man who subscribes owns a part, or a 4 
" share," of the mill, and is therefore called a 
shareholder. 

1 Explain what " raw " cotton is. 

2 Let the teacher point out that, by joining together in 
this way and forming a corporation, men of small means can 
together accomplish what only a man of great wealth could 
do by himself. 

3 Let the children look out the meaning and derivation 
of the word corporation. 



94 LESSONS ON PRACTICAL SUBJECTS. 

All the shareholders must now meet together, 

5 and out of their number choose the wisest and 
ablest to become directors of the mill for a 

6 year. The directors at once choose a president 
and other necessary officers, and fix the amount 
that shall be paid such officers for a year's 

7 work. These directors must meet together to 
discuss the affairs of the mill and take counsel 
with the president, — in fact, direct or manage 
the business of the mill, — hence the name of 
directors. As a rule they have no salaries, for 
they are simply looking after their own prop- 
erty. 

A regular meeting of all the shareholders is 

8 held at least once a year to elect the directors, 
and hear the reports of the officers. If, at any 
time, an important change is to be made in the 
management of the mill, a special meeting of 
the shareholders is called. 

It generally happens, that the men who form 
the corporation cannot afford to subscribe all the 

9 money needed to start the business ; so they 
get other people to take shares, too. 

For every hundred dollars that a man sub- 
scribes, the directors give him a piece of paper 
certifying that the owner of this paper possesses 
one share in the mill ; any one subscribing two 



WHAT IS A CORPORATION ? — MILLS. 95 

or more hundreds of dollars receives a paper 
to that effect ; and so on. These papers are re- 
ceipts 1 from the corporation for the money sub- 
scribed. Now all the shares taken together are 10 
sometimes called the "stock," and these receipts 
are therefore called certificates of stock} Then 
people who own these certificates of stock are " 
called stockholders, which is only another name 
for shareholders. 

Now suppose that the mill is started and 
is running successfully, what becomes of the 
money that the mill earns ? Out of it the 
directors must first pay for the raw material 12 
which is needed, the taxes to the government, 
the wages of the workmen, and the salaries of 
the superintendent and other officers; and sec- 13 
ondly, they must lay by the money for neces- 
sary repairs. Whatever is left after this goes 14 
to the stockholders. Suppose that the mill has 
done very well, and the directors find at the end 
of the year that, after all the expenses have 
been paid, there are $4,800 left in the treasury. 
This remainder they divide among the share- 
holders. Suppose there are eight hundred 
shares of the mill, and that each share cost one 

1 Let the children look out receipt and certificate in the 
dictionary. 



96 LESSONS ON PRACTICAL SUBJECTS. 

hundred dollars. Each shareholder would then 
receive six dollars. This is what is called "pay- 

15 ing a dividend," because the money is divided. 
So this mill pays a dividend of six per cent 
on each share. Mr. Abbott, who owns two 
shares, receives twelve dollars. Mr. Capen, 
who owns ten shares, receives sixty dollars, and 
so on. 

Dividends in well-managed corporations are 
never declared until all the expenses have been 

16 provided for. If the mill has not had a pros- 
perous year, the shareholders get very small 
dividends, or none at all. If the mill fails 
utterly, the shareholders are likely to lose all 
the money that they put in. 



Questions on Chapter XII. 

1. Suppose some men in a town wish to start a mill, 
what must they do first ? 

2. How do they raise the money they require ? 

3. When these men have become a corporation, what 
have they made themselves responsible for ? 

4. What is a shareholder ? Why so called ? 

5. What must the shareholders do when they meet ? 

6. What officers do the directors elect 1 

7. What is the business of the directors 1 Why are 
they generally not paid for this work ? 



WHAT IS A CORPORATION? — MILLS. 97 

8. How often are meetings of the shareholders held ? 

9. Suppose the corporation has not enough money 
to start with, how do the shareholders raise more 1 

10. What are the " receipts " called, which are given 
to all shareholders ? Why are they given 1 

11. What is another name for all the shares? for 
a shareholder ? 

12. What must the directors do first with the earn- 
ings of the mill ? 

13. What secondly ? 

14. If there is any money left, what is done with it? 

15. What is meant by paying a dividend, and to 
whom is the dividend paid? 

16. Do the shareholders receive a dividend every 
year? When not? 



98 LESSONS ON PRACTICAL SUBJECTS. 



CHAPTER XIII. 

what is a corporation ? — {continued.) 

RAILROADS. 

1\ /TILLS are generally started in the way 
-L*-»- we have described; but all enterprises 

1 are not. Suppose, for example, a railroad is 
to be built. For laying the track, building 
engines and stations, etc., very large sums of 
money are needed. Part of this is raised by 
subscribers, who thus become stockholders in 
the railroad, and these men really own the 
railroad. If enough money is not raised by 
subscription to finish the railroad, the direc- 

2 tors then borrow what is needed, and this is 
done by issuing bonds in somewhat the same 
way that the United States did. If the di- 
rectors could not borrow the necessary money, 

3 the work could not be completed ; so you see 
how important it is that they should be able 
to do this. But people will not lend to a 
corporation unless they feel that their money 



WHAT IS A CORPORATION ? — RAILROADS. 99 

is safe, and that they will get it back again. 
Consequently, to make people feel that it is 
safe to lend to this railroad, the directors, when 
they issue the bonds, generally promise that, if 4 
the railroad does not succeed, the people who 
lent the money can sell the engines and other 
property, and so get back — at least in part — 
the money they lent. 

The directors write a circular, 1 whicli is per- 
haps published in the newspapers, and which 
says that every one who will lend one thousand 
dollars to the company, shall receive a piece of 
paper with the promise of the company on it 5 
that, at the end of ten, fifteen, or twenty years, 
as the case may be, the company will repay this 
money to the lender ; and also, that every year 
until that time the company will pay six per 
cent interest (or whatever rate of interest may 
be agreed upon) to the lender. What would 
the interest on $1,000 be for one year at six per 6 
cent ? After this circular has been published, 
any one who wishes to lend money to the cor- 
poration can do so, and receives for it a paper, 
called a bond. These papers are usually signed 
by the president and treasurer ; and, as we have 

1 Let the children look out the meaning of this word in 
the dictionary. 



100 LESSONS ON PRACTICAL SUBJECTS. 

said, they generally promise also, that, should 

7 the railroad not succeed, the bondholders shall 
have the right to sell the road, together with 
the engines, cars, buildings, and land belonging 
to it. In this way they can repay themselves 
as far as possible for the money lent. 

This process is called " selling bonds," or 
"putting bonds into the market." A bond 

8 means something that binds ; and so these 
pieces of paper bind the company to repay the 
lenders the money they have lent at a speci- 
fied time, and until that time comes, to pay 
them interest for their money. They are also 
acknowledgments from the company that it has 
received the money. 

Now suppose that, by selling these bonds, 
the corporation, or company, has borrowed all 
the money needed, and that the railroad is 
started and is running successfully; what be- 
comes of the money that the railroad earns ? 

9 As in the case of the mill, the corporation must 
first pay the wages of the workmen and the 
salaries of the superintendent and other officers ; 
secondly, it must lay by the money for neces- 
sary repairs ; thirdly, it must pay the interest 
on the bonds ; fourthly, it must lay by enough 
money to pay back the bonds as they become 



WHAT IS A CORPORATION ? — RAILROADS. 101 

due ; and lastly, if any money is left, it is 
divided among the shareholders. 

The money laid by to pay back the bonds is 10 
called a "sinking fund." Every corporation 
that borrows money ought to have a sinking 
fund, just as a man ought to lay by money to 
pay his debts. 

Thus you see that a bondholder runs lessil 
risk than a shareholder, for the corporation is 
bound to pay interest on its bonds, but is not 
bound to pay dividends on its stock. Besides, 
if the railroad company fails to pay the interest 
on its bonds, the bondholders, as we have said, 
generally have a right to sell the road, engines, 
buildings, land, etc., and so repay themselves 
the money they have lent, while the stock- 
holders lose all the money they have subscribed. 
On the other hand, if the railroad is very 
successful, the shareholders may receive more 12 
money than the bondholders; for no matter 
how large the profits are, only the promised 
rate of interest is paid on the bonds, whereas 
the dividends paid to the stockholders will 
grow larger as the earnings of the railroad 
increase. 

It is by corporations such as these that nearly 
all railroads and steamships are built and carried 



102 LESSONS ON PRACTICAL SUBJECTS. 
13 



14 



on ; and thousands of mining and manufactur- 
ing companies of all kinds besides. 

Stocks and bonds do not always remain in 
the hands of those who first own them ; for, if 
at any time the owner wants money for his 
stock or bonds, he has a right to sell them, and 
the man who buys them has the same rights 
that the first owner had. 

Therefore stocks and bonds are bought and 
sold like other property, and millions of dollars 
are invested in them every year; so it is im- 
portant for every one to understand something 
about them. 



Questions on Chapter XIII. 

1. Is a railroad generally started in the same way 
that a mill is 1 

2. If a company needs more money than is sub- 
scribed, how is it raised 1 

3. Why do the directors wish to make it safe for 
people to lend them money 1 

4. What promise do the directors generally make 
when they want to borrow money 1 Why 1 

5. What is written on the circulars which the direc- 
tors publish 1 

6. What does a man who lends money to a corpora- 
tion receive in return for his money ? 

7. If the railroad fails, of what value are the bonds ? 



WHAT IS A CORPORATION ? — RAILROADS. 103 

8. Why are bonds so called ? 

9. What is done every year with the earnings of the 
railroad ? 

10. What is a sinking fund 1 

11. Who runs the greater risk of losing his money, 
the shareholder or the bondholder 1 Why 1 

12. If the railroad is successful, whose profit will 
be the greater, the shareholders' or the bondholders' ? 
Why ? 

13. What enterprises besides mills and railroads are 
carried on by corporations % 

14. Do stocks and bonds always remain in the pos- 
session of those who first owned them % How are they 
sold? 

Let the children tell about any corporation of which 
they know, its officers, etc. 



104 LESSONS ON PRACTICAL SUBJECTS. 



CHAPTEK XIV. 

WHAT IS A STRIKE? 

"DROBABLY you have all heard of " strikes," 
-*- and very likely some of you know what 
they are ; but there may be those among you 
who do not, so we will first explain what a 
strike is, and then tell you something about 
them. 

When workmen become dissatisfied with their 
wages, or their work, or for any other reason, 

1 they sometimes refuse to work until their em- 
ployers will grant what they wish. This is 
what is called a strike. As the men say, they 
" strike for higher pay ; " or whatever it may be. 

2 Sometimes the wages have been lowered, and 
the strike is a protest against this ; sometimes 
the men think the wages ought to be raised, 
and they strike for an increase. 

What is called the right of striking is nothing 
more or less than the right of a man or woman 
to refuse to work for the pay that is offered. 
" It takes two to make a bargain," and when 



WHAT IS A STRIKE ? 105 

one man makes an offer to a second man, the 
second man has a right to accept or not as he 
pleases. But the word " strike " is used only 
when a number of persons combine together, 
and agree not to work except for certain wages. 

Why wages are sometimes lowered, and why 
they cannot always be raised, we will now try 
to show you, and will take a strike in a mill as 
an example. 

We have already told you where the money 
to start a mill comes from, what the expenses 
of a mill are, 1 how money is raised to pay the 3 
workmen's wages, and what the dividends are. 
Enough money is generally subscribed at the 
start to pay the men's wages for some time; 
but after that the mill must earn enough to 4 
pay all the expenses. For people will not go 
on subscribing money to any mill which can- 
not sell its cloth, because, when people subscribe 5 
money, they expect to get a profit on it ; and a 
mill cannot go on running and paying divi- 
dends if it does not sell its cloth, or if it 
only sells it for a very small price. Here is 
a somewhat similar case. A boy named Joe 6 
wanted Henry to go shares with him in buy- 
ing a knife. Joe told Henry that, if he would 

1 Have the children name the expenses of a mill. 



106 LESSONS ON PRACTICAL SUBJECTS. 

help him to buy a jack-knife, he could carve 
wooden toys with it and sell them; and that 
lie would pay part of what he got to Henry, 
because Henry owned part of the knife which 
Joe carved with. So Henry gave Joe some 
money, and together they bought the knife. 
If Joe succeeded, Henry would share the prof- 
its, or money, earned by the sale of the toys. 
Now suppose Joe did not sell his toys, and 
suppose too that he had quite worn out the 

7 jack-knife in carving them ; then Joe could not 
share his earnings with Henry, because there 
were no earnings to share. In this case, do you 
think Henry would go shares with Joe in buy- 
ing any more knives ? I think not. Henry 
was willing to do this at first, because he 
thought that Joe would succeed in selling his 
toys ; but, as soon as he saw that the money he 
had subscribed was lost, he refused to buy any 
more knives with Joe. Henry had taken part 
of his savings to buy his share in the knife, and 
did not wish to lose them in that way again. 

8 So it is with a mill ; it must sell its cloth, or 
it cannot carry on business ; and unless it does 
this, nobody will continue to subscribe money 
to keep it running, no matter how much the 
mill-owners may need the money. 



WHAT IS A STRIKE ? 107 

All through the history of the world, there 
are accounts of times of prosperity followed by 
hard times and poverty. There are good rea- 
sons for these changes ; but it would take too 
long to explain them here. During these hard 9 
seasons, mill-owners often find that more cloth 
has been made than people . will buy, or that 
people feel too poor to buy largely. In such 
cases, the directors must do one of two things. 
They must close the mill, or they must sell the 10 
cloth at a lower price ; and if more cloth is made 
than can be sold, it must be put in storehouses. 
Of course, the stored cloth brings in no money, 
and what is sold brings in less than usual. As 
the mill earns much less than it did before, the 
expenses must be cut down. First, the stock- 11 
holders get no dividends on the money they 
subscribed ; and second, the workmen's wages 
are lowered, or else the mill is run on half-time, 
so that the men get less pay. As the mill hand 
expects his wages for the work he does, so his 
employer expects a return for the money he has 
saved and put into the mill. But in bad times 
this cannot be done, and then it is hard for 
all. It is hard for the people who subscribed 12 
money to build the mill to get no return for it, 
and it is hard for the workmen to make fifty 



108 LESSONS ON PRACTICAL SUBJECTS. 

cents do the work of a dollar. Under these 

13 circumstances the men sometimes refuse to 
work for reduced wages, and then there is 
a " strike." 

14 Let us suppose that there was a cotton mill 
in the town of Greenfield, which had been 
started by fifty men, who had taken their sav- 
ings and subscribed to the business. After a 
time, so much cotton cloth came into the market 
that the mill could not sell its goods at a high 

15 price. But the directors thought it better to 
sell their goods for whatever they could get for 
them, than to let them lie idle in the store- 
houses. In this case, the mill earned but little 
money ; and as this little had to pay all the 
expenses, these of course had to be reduced. 

16 The wages were lowered, and the subscribers, 
i. e. shareholders, got no dividends. 

There were many men and women employed 
in this mill, and they were naturally much dis- 
contented at this state of things. The men met 
together, and one man, named Sam Piper, said, 

17 "Let's make the owners pay us the same wages 
we have always had. We can, if we strike. 
We do the same work we have always done ; 
and they want to cheat us." " That 's so," said 
another shiftless man, who was always in debt ; 



WHAT IS A STRIKE ? 109 

" it was hard enough to get on as it was before, 
but we can't get on with less than we 've had. 
We 11 stop working." " Yes," cried most of 
the rest, " so we will." " But," objected one man, 
named Dick Field, " how can we get on with 
no wages at all ? " " 0," said Sam Piper, " we 
will go on credit till we 've made the owners 
pay us what we ought to have." " Well," said 
another man, " we shall have debts enough to 
pay off, even if we get what we want, at the 
end of six weeks." " Yes," said Dick Field, 
"how will it be if we are out of work two 
months, and then have to take just what they 
offer us after all ? " " O, don't think of that," 
exclaimed the shiftless man, " we will have our 
rights first." 

So the workmen, led by Sam Piper, stopped 18 
working. Every week they went to the direc- 
tors, and asked if they could have the wages 
they wanted. Every week the directors said, 
" We can't give you the wages you ask for, be- 19 
cause we can't afford to." This Sam Piper and 
his friends did not understand or believe. But 
Dick Field knew more about it ; he saw why 
the mill could not pay higher wages ; and he 
and some of the other men would have gone 20 
back to work, if Piper and the rest had not 



110 LESSONS ON PRACTICAL SUBJECTS. 

threatened to burn the house of any man who 
would work for low wages. Thus the men who 
were willing to work were forced to be idle 
by those who were not willing to work ; and as 
few had saved enough money to carry them 

21 through weeks of idleness, they had to run in 
debt. ° But as time went on, butchers and gro- 

22 cers demanded payment ; they could not afford 
to give their goods away, and they needed their 
money. The workmen were in a sad state. 
Sam Piper, however, said, " 0, wait, and we 
shall get the wages we want." But idleness 
does not make waiting seem short. The men 
began to vow vengeance on their employers. 
They were hungry and angry, and inflamed 
their anger with drink, and had nightly meet- 

23ings to talk over their troubles. One night, 
after much drinking, the men suddenly ex- 
claimed that they would burn down the mill, 
and so revenge themselves on their employers. 
They collected in a large crowd and rushed to 
the mill, broke open the doors and windows, 
broke the machinery, and set fire to the build- 
ing. Soon all was burned to the ground, and 
nothing was to be seen the next day but a 

24 smoking ruin. The leaders had, however, been 
recognized and caught by other townsmen, who 



WHAT IS A STEIKE ? Ill 

had rushed to see what was happening, and 
were quickly lodged in jail, where for weeks, 
and perhaps for months, they got no wages at 
all. 

Now let us see what all this had done for 
the workmen, and how it affected other peo- 
ple. By striking, the men had run themselves 25 
deeply into debt, and were no longer trusted 
by the grocers and storekeepers. By burning 26 
down the mill, they had destroyed the property 
of the mill-owners, who lost all their money. 
The mill-owners could not afford to rebuild the 
mill, and even if they could have started it 
again, they could not have afforded to give 27 
higher wages than before, because they had just 
lost so much money. So the men were thrown 
out of work altogether, and got no wages at all. 
By burning the mill, they had destroyed the 
machinery that gave them work ; it was like 
killing the goose that laid the golden eggs. 28 
Besides all this, the strike brought other 
trouble. When the mill was burned, a large 
amount of money's worth was lost forever, and 
all men were poorer for that loss. To illustrate 29 
what we mean, ] et us suppose that a mob of 
men in the town of Hamburg should get angry 
with a dealer in wheat, and tear down his 



112 LESSONS ON PRACTICAL SUBJECTS. 

storehouses, and throw all his tons of wheat 
into the sea, there would be just so much less 
food for the people of Hamburg to eat. And 
so, when a mill is destroyed, the material used 
in building it is wasted and lost, and there is 
just so much less material in the world for 
all men to use. 



Questions on Chapter XIV. 

1. What is a strike ? 

2. What sometimes causes a strike ? 

3. Do you remember what the expenses of a mill 
are ? And can you tell how a mill is started ? 

4. After a mill is fairly started, what must it do ? 

5. Why will not people go on subscribing money 
to a mill which cannot sell its cloth ? 

6. Illustrate by the story of Henry and Joe. 

7. What happened to Joe when he could not sell 
the toys he had made 1 

8. Why then is it important for a mill to sell the 
cloth it makes 1 

9. Does it ever happen that a mill makes more cloth 
than it can sell ? When ? 

10. What must the directors do then 1 

11. Tell how the directors cut down the expenses. 

12. Why is this hard for the people who subscribed 
money to build the mill ? 

13. It is also hard for the workmen, and what do 
they sometimes do ? 



WHAT IS A STRIKE? 113 

14. How was the mill in Greenfield started ? After 
it was built, were cotton cloths bringing a high or a low 
price in the market 1 

15. What did the directors do 1 Why 1 

16. What effect did the low price of the cloth have 
on the wages and dividends ? Why ? 

17. What did the workmen say when they met to- 
gether ? 

18. What did the men decide to do 1 

19. What did the mill-owners tell them, when they 
asked for higher wages ? 

20. Why were some of the men ready to go back to 
work ? Why did they not 1 

21. How did the men manage to live without earning 
any wages 1 

22. What did the storekeepers at last tell the men 1 

23. What happened one night when all the men were 
angry 1 

24. What became of the leaders in this crime 1 

25. Had burning the mill done the strikers any 
good? Why not? 

26. Tell the effect of the fire on the mill-owners ; on 
the people who had subscribed money to the mill. 

27. If the mill-owners had been able to start the 
mill again, would the workmen probably have got high 
wages 1 Why not ? 

28. Burning the mill was like what fable you have 
heard ? 

29. Why would all men have been poorer for the 
burning of the mill, even if it had been rebuilt 1 Illus- 
trate. 



114 WESSONS ON PRACTICAL SUBJECTS. 



CHAPTER XV. 

what is A strike ? — {continued.) 

\\ 7HEN" bad times come, if a mill can earn 
* * even a little, it helps to tide the bad time 

1 over ; but if the workmen strike, the mill loses 
the chance of earning even that little. It is 
somewhat the same with a man's family ; when 
he cannot get much work to do, it is hard for 
them to manage, and when he cannot get any 
work at all, it is harder for them than ever. 
If the mill cannot sell its cloth at all, nor 
the man earn money at all, neither can get on 
at all. 

Let us ' now tell you of another mill, in 
Hampton. Here wages were lowered, as they 
were in the Greenfield mill. The workmen 

2 also struck ; but when they could not afford to 
go without work any longer, they went to work 
at the lowered wages ; for they thought that 
" half a loaf was better than no bread." The 

3 strike caused loss to the owners, because, when 



WHAT IS A STRIKE ? 115 

no goods were made, none could be sold (except 
what happened to be on hand), and also because 
it injures machinery to let it stand idle. The 
men lost their wages for the time they were 4 
out of work ; and not only this, but they had 
to take from what they were earning when they 
began to work again to pay their debts, and had 
to scrimp themselves and their families to do 5 
this. But it did not bring so much loss to 6 
either the owners or men as if the mill had 
been burned. 

Now we will speak of a third mill, one in 
Whiteland. A set of thrifty men worked in this 
mill, and nearly all had some money laid by in 
a bank. When the Greenfield and Hampton 
mills lowered wages, the Whiteland mill had to 
do the same, and for the same reasons. When 7 
the workmen met to talk the matter over, one 
of them, named Joseph Allen, said : " It seems 8 
to me we should be very foolish to strike. All 
summer, the newspapers have been saying that 
the times are very bad everywhere, — that all 
manufactories and railroads are not earning 
much, and that they can't afford to pay their 
men as much as they have done. If we want 
to ask for higher wages, let 's wait till times are 
good, when the mill-owners can afford to raise 



116 LESSONS ON PRACTICAL SUBJECTS. 

our pay." "Yes," said David Crocker, "it's 
better to get a little than nothing at all, and 
I've got five children to look after." So the 
9 men agreed not to strike, but to go on working 
until better times came ; and what with their 
savings and hard economy they managed to 
get on. One day, after some months had gone 
by, Joseph Allen declared that he had seen in 

10 the papers that cotton cloth had been selling 
for higher prices, while the cost of making it 
was the same, and that times were everywhere 
better. "Now," said he, "is our time." And 
he told the other men so, and they went to 
their employers, the mill-owners, and said that 
they thought they ought to have higher wages. 

11 As the mill-owners could now get a better 
price for their cloth, and their expenses had not 
increased, they felt that they could afford to pay 
more in wages ; so they agreed to the workmen's 
petition, and raised the wages. Thus the men 

12 gained their point without a strike. The own- 
ers had lost, and the workmen had lost; but 
neither had lost as much as if there had been a 
strike. The owners had lost by the low price 
of cotton goods. The workmen had lost part 

13 of their wages and were a little in debt ; but 
they were far more comfortably off than they 



WHAT IS A STRIKE ? 117 

would "have been if they had struck and been 
out of work for weeks. 

Which set of men do you think showed the 
most common sense ? 

Of course, workmen have a right to strike, 
provided that they injure no property and pre- 
vent no other men from working, and provided 
that they do not burden any one else with their 
support. Sometimes it is the only way by 
which they can set things right. As there are 
good workmen and bad workmen, so there are 
good employers and bad employers, and the 
right to strike is the workmen's protection 14 
against a bad employer, who knows that if he 
is not just to his men they can refuse to work 
for him. The right to strike is, therefore, a ne- 
cessary one, but the wisdom of actually striking 
work is quite another matter. The only reason 
why workmen had better not do so is that high 
or low wages do not generally depend on the 
good or bad will of an employer. They de- 
pend upon more causes than we can explain, 
but we will try to point out one. 

If a mill-owner has to pay a large price for 15 
his raw cotton, his profit may not be large even 
if he sells his cloth for a good price, and he may 
have to pay low wages. We will illustrate this 
by a little story. 



118 LESSONS ON PRACTICAL SUBJECTS. 

Simon was a miller, who owned a grist-mill. 
He hired a man, named Jacob, to help him do 
his work. He bought some corn for $20, and 
when it was ground he sold the meal for $30. 
That left him $10, out of which he paid Jacob 
$4 as wages, and then had $6 left for himself. 
Now if he could buy the corn at a low price, 
say $10, and could still sell it for $30, he could 
pay Jacob higher wages and yet make a good 
profit. But suppose that he had to pay $25 for 
his corn, and sold it for $30. He would then 
have only $5 left, and he could not afford to 
keep Jacob, and would have to dismiss him. 
So you will see that, when the employer cannot 
make any profit, and the workmen must take 
low wages or none, a strike cannot help them. 

It is simply a question for workmen to decide, 
whether a strike is wise or foolish, and it has 
generally been found to be more foolish than 

16 wise. In the last forty years, scarcely a strike 
has been successful in England or America; 
that is, workmen have struck work, gone with- 
out wages, and at last been forced to return to 
their work, often for the same pay that they 
refused in the first place. 

17 Workmen should first calculate for how long 
a time they can afford to be idle without bring- 



WHAT IS A STRIKE ? 119 

ing great distress on their families, and also 
whether, if successful, the increase for which 
they are striking will make up to them for the 
entire loss of wages during the strike. 

What must we learn from all this ? To "look 18 
before we leap." If workmen are dissatisfied 
with their wages, let them first carefully ex- 19 
amine the prices at which goods are selling in 
the markets, and, secondly, what the expenses 
of the mill are, and then see if their employers 
can give them more pay before they strike for 
it. Sometimes it is possible for workmen to 
avoid a strike, by choosing the wisest among 
them to look into these matters and talk them 
over with their employers, and so prevent much 
distress and misery. Above all, the workmen 
should be careful not to destroy property, first, 20 
because it is wrong, and, secondly, because they 
gain nothing by it, and lose much. 



Questions on Chapter XV. 

1. Why is it important, when times are bad, that a 
mill should be able to earn even a little? 

2. When the wages were lowered in the Hampton 
mill, what did the men do ? 

3. Why was this a loss to the owners 1 



120 LESSONS ON PRACTICAL SUBJECTS. 

4. Why was this a loss to the workmen ? 

5. Why were the men worse off than they would 
have been if they had not struck ? 

6. Was the loss greater, or less, than if the mill had 
been burned ? Why ? 

7. What did the Whiteland mill hands do during 
this time ? 

8. What did Joseph Allen tell the men ? 

9. What did the men agree to do ? Why ? 

10. Some months later, what did Joseph Allen learn 
from the newspapers, and what did he and the rest do 1 

11. Why did the directors grant their request ? 

12. Was there any loss in this case ? Who lost, and 
why? 

13. In which of the three towns was the loss the 
least? Why? 

14. Why is the right of striking useful to workmen ? 

15. Why may a mill-owner be unable to pay high 
wages, even when he sells his cloth at a high price? 
Illustrate. 

16. Have strikes generally been successful ? 

17. Even when it seems reasonable to strike, what 
should men first be careful to find out before they 
strike 1 

18. What is to be learned from the story of these 
strikes ? 

19. When w r orkmen are dissatisfied with their w r ages, 
what is the wisest plan to follow ? 

20. In any case, why should they not destroy prop- 
erty ? 



DEBT AND SAVING. 121 



CHAPTER XVI. 

DEBT AND SAYING. 

SOMETIMES we see strange differences in 
the way in which two men in the same 
circumstances get on in the world. With the 
same amount of money, one will be prosperous 
and living in comfort, while the other will al- 
ways be poor and in debt. Now why is this ? 
A dollar is a dollar ; and why is it that some 
people seem to do so much more with it than 
others ? 

It is a secret, but a secret that any one of 
you may learn if he will, — the secret of econ- 
omy. 1 The first rule of it is, Always live 
within your income. Your income is the money 
that comes in every year, — what is earned, in 
fact. A man cannot always make his income 
as large as he would wish; but he can often 
regulate what money he will spend. And, of 
course, if he spends less than he receives, there 

1 Let the children look out the definition of economy. 



122 LESSONS ON PRACTICAL SUBJECTS. 

is something left ; that something, the savings, 
makes the difference between comfort and 
poverty. A well-known writer has truly said 
something like this : " Given, income one dol- 
lar a day, outgo ninety cents ; result happiness. 
Given, income one dollar a day, outgo one 
dollar and ten cents ; result misery." 

When a man has a little money ahead, it 
frequently helps him to save more. The follow- 
ing story will give you an example of this. 

1 John White and James Mason were two 
laborers, who each earned ten dollars a week. 
They both had families to support ; but, while 
White had saved up fifty dollars and put it in 
the bank, Mason had saved nothing. Both these 
men could only get odd jobs in winter, so the 

2 money earned in summer must be counted upon 
to support them through the winter months. 

As we have seen, John White was a thrifty 
man, desirous of making every dollar go as far 

3 as he could. He knew that coal cost generally 
$6 a ton in summer, and $8 in winter. As he 
had money saved up, he could buy his four 
tons of coal in summer for $24, while in winter 
his four tous would have cost him $32. Thus, 

4 by buying his supply of coal when it was cheap, 
he saved $8 a year. 



DEBT AND SAVING. 123 

Let us see how his neighbor, James Mason, 
managed. Mason had been running in debt all 
winter for all that he bought, and had not a dollar 
saved in any bank. He needed one ton of coal 
in summer, but had to buy it by the basketful, 5 
and pay thirty cents a basket ; so that by the 
time he had bought a ton, or twenty-five bas- 
ketfuls, it had cost him $7.50. During the fol- 6 
lowing winter he had to buy three tons of coal, „ 
each by the basketful ; and as coal was dearer 
in winter, he had to pay thirty-eight cents a 
basket. At this rate, a ton cost him $9.50, 7 
and three tons three times that, or $28.50. If 
you add the price of the ton bought in summer, 
you will see that his coal for one year had cost 
him $36. 1 So James Mason's yearly supply 8 
of coal cost him $36, John White's cost him 
$24; and therefore James Mason had to pay 9 
$12 more than he need have done. So it was 
with flour, and sugar, and many other things, 
which White, by thought and saving, could buy 
in large quantities, and when they were cheap ; 
while Mason, buying but a little at a time, had 
to pay high prices. Now Mason had also run 
in debt for his house-rent, and at last asked his 

1 Let the children make these calculations for themselves 
on the "blackboard. 



124 LESSONS ON PRACTICAL SUBJECTS. 

10 landlord, Bobert Davis, to let him put off pay- 
ing the rent for two months. 

Davis could not afford to do this. So when 
Mason complained that he had a family to sup- 

11 port, Davis answered : " I also have a family to 
support, and have saved the money to buy this 
house, and cannot let any one live in it rent- 
free. If you do not soon pay me, you must find 
another house." 

At last, Davis had to turn Mason out of his 

12 house. Mason was very angry, and complained 
of Davis as a hard landlord and down on the 
poor. Mason seemed to think that Davis ought 
to save money, build a house, and then let him 
have it rent-free. He was unable to realize 
that Davis needed the money exactly as much 
as he himself did. 

13 Sometimes, when a workman does not pay a 
debt, the person to whom he owes the money 
can obtain it directly from the employer ; and 
this was the way in which Davis at last got 
his rent from Mason, who of course had to 
work, and yet had his wages taken to pay his 
debt. Truly this was harder than if he had 
saved money beforehand in order to be ready 
to pay his rent when it should become due. 

This method of getting a debt paid, by going 



DEBT AND SAVING. 125 

to the employer and obliging him to pay a 
man's wages to his debtor, is called trusteeing 
wages, or, as they say in the West, garnisheeing 
wages, and we will explain it by the following 
true story. 

In our great Western country, hundreds of 
engineers and firemen are employed on the rail- 
roads, and an experienced officer of one of these 
roads has told how a certain superintendent 
dealt with the workmen who ran in debt and 
had their wages trusteed. 

A fireman named Briggs would not pay his u 
butcher. The butcher brought his unpaid bill 
to a lawyer, who went to the superintendent of 
engineers and obliged him to pay Briggs's wages 
to the butcher. The superintendent then said 
to the fireman, " Mr. Briggs, if your wages are 
ever trusteed again, you leave this railroad. 
We will employ no man who does not keep 
out of debt." Briggs answered, "I could get 15 
along, if I only had higher wages." The super- 
intendent replied, "We employ no men whoi6 
do not live within their means, whether they 
have one thousand dollars a year, or three hun- 
dred. There are other men with families who 
earn no more wages than you do. You must 
spend no more than you earn, or you leave us." 



126 LESSONS ON PRACTICAL SUBJECTS. 

Out of many firemen and engineers whose 
wages were trusteed, this superintendent found 

17 but three whose debts were unavoidable, and 
were caused by long illnesses, which had pre- 
vented their working. These three were paid 

18 part of their wages, while the rest of the money 
went towards the discharge of their debts, and 
they were not turned off. But all the others 

19 who ran in debt after this warning were dis- 
missed, having been proved to be unworthy, 
thriftless men. 

20 After this, men were rarely discharged from 
the railroad for debt ; because, as soon as they 
felt that their future work and livelihood de- 
pended on their own economy, they were care- 
ful not to spend more than they earned. 

21 The superintendent added, that, in the town 
where he lived, there were a number of en- 
gineers who had pretty houses with well-kept 
yards and flower-beds. These men had saved 
money to invest, so that it brought them in a 
small income, besides their wages. Other en- 
gineers had spent their money as they got it; 
their houses were poor and dirty, and they had 
nothing saved for sickness or old age. 



DEBT AND SAVING. 127 

Questions on Chapter XVL 

1. What can you tell about the laborers John White 
and James Mason 1 

2. If they have work only in the summer, what 
must they do in order to provide for the winter 1 

3. Is there any difference between the price of coal 
in summer and in winter 1 About how much 1 

4. How much might John sometimes save if he 
bought his coal in summer ? 

5. How did James Mason buy his coal ? 

6. At thirty cents per basket, how much did one 
ton of coal cost him ? 

7. How much in winter, when it was thirty- eight 
cents ? 

8. How much did three tons cost him in winter ? 
Add the ton bought in summer, and how much had four 
tons of coal cost James ? 

9. How much had John's cost him ? Then how 
much did James lose by not saving money to buy his 
coal with ? 

10. When Mason could not pay his house-rent, what 
did he ask his landlord to do 1 

11. Why did Davis refuse ? 

12. When Mason was at last turned out, what com- 
plaint did he make ? Was this fair 1 

13. How did Davis at last get his rent 1 

14. Tell about Briggs, the fireman, who had his 
wages trusteed. 

15. What complaint did Briggs make ? 

16. What was the superintendent's reply ? 

17. Among those who had their wages trusteed 



128 LESSONS ON PRACTICAL SUBJECTS. 

were there any whom the superintendent did not turn 
off? Why? 

18. What was done for them 1 

19. What became of the thriftless men ? 

20. What effect did the superintendent's rule have on 
the men 1 

21. What did the superintendent say about some of 
the engineers in his town 1 



DEBT AND SAVING. 129 



CHAPTEK XVII. 

DEBT AND SAVING. — (continued?) 

\ JSTOTHER class of debts which may be 
-£*- of benefit are those undertaken by men 
of small means to buy horses, houses, land, or 
other durable property, by the sale of which 
they can at any time pay their debts. 

Here is an example. Mr. Brown felt that, if l 
he owned his house, he would have to pay less 
in taxes than he already did in rent. He bor- 2 
rowed the money of a Mr. Taylor, agreeing that, 
if he did not pay it back within a certain num- 
ber of years, Mr. Taylor should have the house. 
He bought the house, and worked hard every 
year to pay the interest on the borrowed money, 
and also to pay back part of the principal itself. 
After a few years of thrifty labor, he had 3 
paid them both, and owned the house. If Mr. 
Brown had been unable to repay the borrowed 
money, Mr. Taylor could have taken the house 4 
in payment of his debt, and so have lost 
nothing. 



130 LESSONS ON PRACTICAL SUBJECTS. 

But, as a rule, those debts are to be con- 
demned which are undertaken for food and 
clothing, or any article that is at once used up, 
because there is great risk that the lender will 
not be repaid. For example, if Mr. Brown had 
borrowed money for food and coal, and had 
afterwards failed to repay Mr. Taylor, the food 
and coal would have been used up long before, 

5 and there would have been nothing which Mr. 
Taylor could take to make up for the money 
lent ; and it would therefore have been a dead 
loss to him, which perhaps he could ill afford. 
Moreover, it would be a disadvantage to Mr. 
Brown not to have repaid the money, because 
his neighbors would be unwilling to trust a 
man who did not pay his debts. 

As we have said, all through the history 
of the world there have been times of plenty, 
followed by times of want and misery. Before 
closing this lesson on debt and saving, we will 
tell you a true story, showing how thrifty hab- 
its will enable men and women to get through 
hard times without suffering. 

In 1868, or thereabouts, two Swedish cabi- 
net-makers came from Sweden to Philadelphia. 

6 There they found work ; and out of their wages 
they saved enough money to send to their sis- 



DEBT AND SAVING. 131 

ter to pay her passage from Sweden to America. 
When she arrived, she found a good situation, 
and the three then managed to save more 
money, and sent enough to their old father to 7 
pay off a mortgage on his farm. They con- 
tinued their thrifty habits, and at last had laid 
by a considerable sum of money. 

In 1873, a great panic occurred in money 
matters ; many banks closed, and could not pay 
coin for their paper ; merchants failed ; mills 
could not sell their goods, and had to stop 
running ; and many men were thrown out of 
employment. Among these men were the two 
Swedes; but they had saved enough money 8 
when they received good w 7 ages to support 
themselves now, without asking help. They 
still kept at work making sets of furniture for 
themselves. In the spring, one of them heard 
there was a demand for cabinet-making at St. 
Paul, Minnesota, and he and his wife moved 
there. Finding the report true, and good work 
to be had, he sent for his brother and sister, 
who were now both married. They set out im- 
mediately, taking with them the furniture the 
brothers had made. Afterwards, they bought 9 
land outside of St. Paul, built themselves a 
house, and are now prospering at their trade. 



132 LESSONS ON PRACTICAL SUBJECTS. 

Examine into the way that almost every for- 
tune was made, and you will find that it was 

10 begun, as these Swedes began theirs, by hard 
work and economical habits ; not by any won- 
derful stroke of luck, and certainly not by 
recklessness and waste. 

By getting into debt, a man can put off pay- 
ment, but he cannot avoid it altogether. He 
must pay some time. He cannot continue to 

11 get food to eat and coal to burn, and give noth- 
ing in exchange for them. As these articles 
must be paid for sooner or later, is it not far 
better to pay as you go, than to run up a debt 
which is sure to be a burden in the future ? 
Besides, one debt is apt to bring on another : 
a man who borrows once is apt to borrow 
again to pay off the first loan, and very likely 
to increase the amount a little, so that the debt 
piles up, and he sees no way to pay at all. 
Much misery and many crimes can be traced 
to the first debt. It is the most expensive of 
all luxuries. 

Saving is by no means easy, and economy is 
hard enough to practise ; but in spite of the 
many difficulties in the way, and the up-hill 
work, plans for saving can be carried out, and 
not only the advantages we have named, but 



DEBT AND SAVING. 133 

many others, will reward any one who has the 
pluck to work for them. 

Planning beforehand to keep within one's 
earnings or income, and save a little besides, 
insures independence, final gain, and sometimes 
even wealth. 



Questions on Chapter XVII. 

1. What advantage did Mr. Brown think he could 
gain, if he owned a house instead of hiring one 1 

2. How did he raise the money to buy it ? 

3. Did he succeed in paying back the money 1 

4. If he had not paid it back, would Mr. Taylor 
have lost all his money '? Why not 1 

5. If Mr. Brown had borrowed the money to pay 
for food and clothes, and had saved up none to pay 
the debt, could Mr. Taylor have got his money back 1 
Why not? 

6. What did the two Swedes do who came to this 
country in 1868 1 

7. When the sister came, what did they all three 
save money for ? 

8. When they were thrown out of employment, 
some years later, were they poorly off 1 Why ? 

9. What finally became of them 1 

10. How did the Swedes earn their success ? Then 
whose plan of life was best, Mason's or the Swedes' ? 

11. Can a man continue to get food and coal, and give 
nothing in return for them ? 



134 LESSONS ON PRACTICAL SUBJECTS. 



CHAPTER XVIII. 

WHAT ARE SAVINGS BANKS? 

TF men and women who work for money earn 
■*■ a little more than they spend, they nat- 
urally look for some safe place to put their 

1 savings in. Some people tie their money up 
in stockings and hide it in closets ; others put 
it in old teapots. All sorts of odd hiding- 
places are chosen. We have even heard of a 
man who put away some paper money in an 
old stove, and left it there for many years, until 
one day his wife, not knowing that the money 
was there, had the stove put up and made a fire 
in it, and the money all went up the chimney 
in smoke. 

2 We will now tell you about a place where 
such money can be put, and where it can be 
invested so that it may earn something for its 
owner. 

We will describe to you how such a place, 
which is called a savings bank, is established. 



WHAT ARE SAVINGS BANKS ? 135 

We will suppose that three or four honest and 3 
respectable men agree in wishing to have such 
a bank started, and that they are willing to 
subscribe money to defray the first expenses. 
They then go to the Legislature 1 of the State, 
and ask permission to establish a savings bank, 
promising to conduct it according to the laws 4 
of the State. The Legislature, if it is satisfied 
that the men are honest and responsible, gives 
them a paper, called a charter, which begins 5 
somewhat as follows : — 

Samuel Brown, William Evans, and Peter 6 
Twing, and their associates and successors, are 
hereby made a corporation, by the name of 
the Quincy Savings Bank, — or whatever name 
be chosen. The associates are such men as 
Samuel Brown and his companions may choose 
to have join them. 

These men then meet, and elect a president, 7 
one or more vice-presidents, a board 2 of not 
less than nine persons called trustees, 2 a treas- 
urer, clerk, and such other officers as may be 
thought necessary. Most of these men, except 
the trustees, are paid for the work they have 8 
to do. It is a rule, that all officers shall be 

1 Ask the children what the Legislature is. 

2 Explain the derivation and meaning of board and trustee. 



136 LESSONS ON PRACTICAL SUBJECTS. 

9 voted for once a year, except the treasurer, who 
holds office so long as the nine trustees wish, 
and also can be removed at their will. Every 
corporation may, at the yearly meeting, choose 

10 any citizen of the State to be a member. All 
this is established by the laws of Massachu- 

11 setts; but the laws are different in different 
States. 

The savings bank is now organized, and 
when it is established in a suitable building, 
with vaults for the safe-keeping of money, and 
when it has its clerks and account-books, it is 
ready for business. Then people can come and 

12 place, or deposit, their money there for safe- 
keeping, and receive interest on it. And if, 
by putting your money in a savings bank, 
every dollar can be made to earn three cents 
a year for you, it is certainly better than to 
have it lying idle in an old teapot. The peo- 

13 pie who deposit money in a bank are called 
depositors, and their money, deposits. 

14 If a man put one hundred dollars in a bank, 
which pays three per cent interest on a dollar, 
at the end of a year, how much interest will be 
paid him ? x Three dollars. Then, in this case, 
the money saved has, instead of lying idle, been 

1 Let the children answer this themselves. 



WHAT ARE SAVINGS BANKS ? 137 

made to earn in one year three dollars for its 
owner. 

Many of the people who put money in a 
bank think that the dollars stay there just as 
if they were in a box. This is not the case. 15 
If it were, where do you think the trustees 
could get the money from to pay the officers' 
salaries, the interest on the money deposited 
in the bank, and other expenses ? 

A great part of the money which is depos-16 
ited in a bank is lent again to certain people, or 
corporations, who pay the bank interest for the 
use of it. This is called investing the deposits ; 17 
and it is the business of the bank officers tois 
see that the savings are wisely lent. Of course, 
it is yqtj necessary that the directors should 
lend money only to people, or corporations, 
who are steady and honest ; for if they lent the 
savings intrusted to their care to unsteady or 19 
dishonest corporations or persons, the money 
would probably be wasted, the savings bank 
might be ruined, and the people who placed 
their money in it would lose their savings. 

In order that the investments shall be prop- 20 
erly made, the Legislature of Massachusetts has 
made laws, which allow savings banks to invest 
the deposits only in certain ways. 



138 LESSONS ON PRACTICAL SUBJECTS. 

21 First. The trustees may lend money on mort- 
gages on real estate. (Real estate simply means 
land, houses, or other buildings.) The laws also 
allow banks to lend only sixty per cent of the 
value of such property. 

We will try to explain what this means. 
Peter Wright wishes to buy a piece of land 
which is worth one hundred dollars, but he has 
not the money. He feels that he can cultivate 
this ground, and in time make it profitable. 
He goes to the officers of a savings bank and 

22 says : " I want to buy a piece of land, and have 
not money enough. The town values the laud 

23 at one hundred dollars. I know that the law 
will not let you lend one hundred dollars on 
one hundred dollars' worth ; but it will let you 
lend sixty per cent of its value. That would 
be sixty dollars. 1 Now, if you will lend me 
sixty dollars, I can raise the rest of the money 
elsewhere. For every year that I keep the 

24 sixty dollars, I will pay you an interest of eight 
per cent, or S4.80. 1 At the end of four years, 
I agree to pay back the principal. But in case 
I should fail to do this, or to pay the yearly 
interest, I will give you the right to take the 
land and sell it, in order to repay yourselves 

1 Let the children make these calculations themselves. 



WHAT ARE SAYINGS BANKS? 139 

the sixty dollars which you lent me." The offi- 
cers having agreed, Peter Wright gives them 
a paper, called a mortgage, in which he promises 25 
to do all this. Peter Wright has the advantage 26 
of being able to borrow the money, and so buy 
the land. The bank has the advantage of re- 
ceiving $4.80 a year on the sixty dollars lent ; 
and, at the end of the given time, the bank 
either receives back the principal, or, if Peter 
Wright be unable to pay that, it has the right 
to seize the land. 

To put it all in a few words, a mortgage is a 27 
promise, from the borrower, to return at the end 
of a given time the money lent, and during 
that time to pay a yearly interest on that 
money ; should the borrower fail to pay the 
interest, or at the end of the time be unable to 
pay back the principal, the land or other prop- 
erty goes in payment to the lender. 

When property is thus taken possession of 
by the lender, he is said to have " foreclosed " 28 
the mortgage. Sometimes, when both parties 
agree to it, a mortgage can be extended for 
another term of years. 

Second. A savings bank may also lend money 29 
to the United States; that is, it may buy 
United States bonds. Of course the United 



140 LESSONS ON PRACTICAL SUBJECTS. 

States pays interest on the bonds to the bank, 
as it does to private people. 

30 Third. In Massachusetts, banks also lend 
money to towns and cities in the State, and 
in return for the money lent them, these cities 

31 and towns give to the banks bonds, on which 
interest is paid, as on the United States bonds. 

Fourth. Banks may buy bonds of railroads 

32 in the State, under certain conditions. These 
conditions are, that the railroads shall have 
been paying interest on their bonds, 1 and divi- 
dends on their stocks, 1 for two years. If the 

33 railroad fail to pay interest, or principal, the 
bank can seize the land, engines, etc. belong- 
ing to the railroad, and sell them for its own 
advantage, thus repaying itself for the money 
lent. 

Certain other investments of the deposits are 
35 allowed by law, but they are not so important, 
and it would take too much time to explain 
them all. Savings banks generally lend their 
deposits to corporations, and receive five or six 
per cent interest for it. One twentieth of this 
interest is generally needed by the trustees to 
pay the salaries of the officers, to pay state taxes, 

1 Ask some child to tell what bonds are ; and another, 
what stocks are. 



WHAT ARE SAVINGS BANKS? 141 

to pay the necessary expenses, and to provide 
for accidental losses. The remainder is divided 
among the depositors, giving them two and a 
half or three per cent, and sometimes four per 
cent interest. Of course, you will easily under- 
stand that, if the bank did not get a higher rate s 
of interest than it gives the depositors, it would 
have no money to pay its expenses with, and 
could do no business. 

To illustrate. 1 The deposits of the Oxford 
Savings Bank amounted to $2,000,000. There 
is no law obliging a savings bank to keep 
any amount of the deposits on hand ; but, for 
convenience, we will suppose that one fourth 
of them, or $500,000, were kept in reserve. 
The remaining three fourths ($1,500,000) were 
lent, and brought in five per cent interest, or 
$75,000. One twentieth, or five per cent of 
this sum, which is $3,750, was needed to pay 
the necessary expenses. Subtract this from 
the whole earnings, and it leaves $71,250 to be 
divided among all the depositors. As there 
were $2,000,000 deposited, that would give 
what per cent to be paid on each dollar? 
Three and a half. 

1 Make the children go through these calculations on the 
blackboard. 



142 LESSONS ON PRACTICAL SUBJECTS. 

No money should ever be deposited in any 
bank, or lent to any private individual, or cor- 

37 poration, without a written receipt being given 
for it. This receipt proves that the money 
has been lent, or deposited, and is generally 
written in a bank-book, which every depositor 
should have ; or, in case of loaning money to 
private persons, it is written on a piece of 
paper. 

If a man has a large sum of money in a 
bank, and should wish to take it all out, he 

38 must give notice to that effect from three to 
six months beforehand, and when the time is 
up, the bank must be ready to repay him. 
For the withdrawal of small amounts, no notice 
is necessary. 

Some savings banks will receive only a lim- 
ited sum from any one depositor. 



Questions on Chapter XVIII. 

1. Where do many people put the money which 
they save ? 

2. Are there any better places than old teapots and 
stockings to put savings in ? Why are they better ? 

3. If a number of men wish to start a savings bank, 
what must they first do ? 



WHAT ARE SAVINGS BANKS? 143 

4. What do they promise to the State ? 

5. What does the State give them 1 

6. Can you tell how the charter begins 1 

7. What is the next step to be taken by these men 1 

8. Are all the bank officers paid for what they do ? 

9. How often must the officers be voted for ] Is the 
treasurer also elected every year ? 

10. Whom may the corporation choose as members 1 

11. Are the laws about savings banks the same in all 
States % 

12. After the bank is organized, what is done ? 

13. What is a depositor 1 What is a deposit 1 

14. If you deposit one hundred dollars in a savings 
bank which gives three per cent interest, how much will 
it earn for you in one year I 

15. Does all the money put in a savings bank stay 
there 1 Why not 1 

16. What is done with the money ? 

17. What does " to invest" mean % 

18. Who invests the deposits 1 

19. Why must the directors of a savings bank be care- 
ful to lend money only to steady and honest persons and 
corporations ? 

20. What has the Legislature of Massachusetts done 
to make sure that such investments shall be properly 
made ? 

21. What is the first investment which the law allows 
banks to make ? 

22. What can you tell about the man who wanted to 
borrow money to buy a piece of land ] 

23. Are the savings banks allowed to lend sixty 
dollars on real estate worth sixty dollars ? What per 
cent of the value are savings banks allowed to lend 1 



144 LESSONS ON PRACTICAL SUBJECTS. 

24. What does Peter Wright agree to do in exchange 
for what the bank lends him ? 

25. What does he give the savings bank ? What is 
the paper called ? 

26. Of what advantage is this arrangement to Peter 
Wright ? To the bank ? 

27. Tell what a mortgage is. 

28. What is foreclosing a mortgage ? 

29. What is the second investment that the law of 
Massachusetts allows banks to make 1 

30. The third? 

31. What do the banks receive in return for the 
money lent to cities and towns ? 

32. Under what conditions may they lend money to 
railroads ] 

33. When may a savings bank seize the property of 
a railroad \ 

34. Name again the investments we have told you 
about, which the law of Massachusetts allows savings 
banks to make. 

35. Are these the onty investments allowed ? 

36. Is the same rate of interest given to the depositors 
that the savings bank receives from its investments ? 
Why not ? Illustrate. 

37. When you lend money to any one, what must 
you always receive in exchange ? Why ? 

38. Can depositors draw large sums from the savings 
banks whenever they like ? 

Tell anything you know of any particular savings 
bank. 



WHAT ARE SAVINGS BANKS ? 145 



CHAPTEE XIX. 

WHAT ARE SAVINGS BANKS ? — {continued) 

TQEOPLE fancy that they are doing well by 
-*- themselves, if they can so invest their 
savings that they will bring them in a high rate 
of interest, eight, ten, or even twelve per cent. 
Bat the wisest business men declare, that, the 
higher the interest, the greater is the risk of 
losing the money invested. 

The reason of this is, that a steady or safe 
corporation can borrow money at a low rate of 
interest; for the lenders feel sure that money i 
intrusted to its care is safe. On the other 
hand, if a bank, or corporation of any kind, be 
starting an uncertain business, which may fail, 2 
it has to bribe people to invest in it, by of- 
fering a high rate of interest, — ten, twelve, or 
fourteen per cent, sometimes even more. An 
example of interest growing smaller as the 
investment grows more secure was given in 
Chapter VI., when speaking of United States 3 

10 



146 LESSONS ON PRACTICAL SUBJECTS. 

bonds. When there was danger that the 
country might go to pieces, the government had 
to offer 7.3 per cent interest on its bonds to in- 
duce people to buy them. Now, the govern- 
ment being firmly established, people are eager 
to buy bonds paying only three per cent. 

Not long ago, in 1880, there was an exposure 
of an enterprise which offered a high rate of 
interest, and so induced many poor and hard- 
working women to put their earnings in it. 
The history of this scheme it may be well to 
give here, as a warning to those who believe 
that the greater the interest, the greater the 
lasting gain. 

A woman, calling herself Mrs. Howe, started 
this enterprise in Boston, under the name of the 
" Ladies' Deposit Company," where poor un- 
married women and widows might place their 
: savings. Mrs. Howe promised to pay ninety-six 
per cent interest. This was at the rate of $8 
interest a month on every $100 deposited. She 
promised to give to every woman who put in 
$100 the first three months' interest in advance, 
which was $24. The same amount was prom- 
ised for every three months, as long as she kept 
her deposit there ; but she might take out her 
money whenever she liked. Thus, if she left 



WHAT ARE SAYINGS BANKS ? 147 

her money in for a year, at the end of that 
time she would receive $96 in interest. Then, 
if she chose, she could take out her $100, and 
would have in all $196. No sum over $1,000 
was to be received. 

If you recollect that the savings banks con- 5 
ducted on the best principles, after laying by 
money enough for running expenses and acci- 
dental losses, can only give from two to four 
per cent interest, you will readily understand 
how unreasonable and ridiculous Mrs. Howe's 
proposal was. 

Mrs. Howe had not applied to the Legislature 6 
for any charter ; there were no responsible 
trustees to make sure that the deposits were 
safely invested; nor was any yearly report 
published to show where the money for this 
enormous interest came from. When ques- 8 
tioned as to where she obtained this money, 
she replied with some vague story, but no one 
knew clearly anything of the matter. 

The high rate of interest offered tempted 
many women to put their money in Mrs. 
Howe's "bank." The interest was paid prompt- 
ly ; the depositors were delighted, and told their 
friends about their " bank," which was so much 
better than ordinary savings banks, with their 



148 LESSONS ON PRACTICAL SUBJECTS. 

two, three, or four per cent interest. So a great 
many women came, most of them poor women, 
who did not know much about banks and in- 
vestments, but who were eager to get the high 
rate of interest. But what was done with the 
deposits ? and where did the money for the 
interest come from ? 

Mrs. Howe managed in the following way. 
9 Jane Roper came first and put in Si 00, and 
was paid the promised three months' interest of 
$24 in advance. Mary Wood came next, and 
put in $100. At the end of the year, Jane 
Roper came to take out her deposit, which was 
paid her, and the remaining interest due her, 
of $72, was paid out of Mary Wood's money. 
Next came Hannah Ellis, and deposited $100. 
When Mary Wood wanted to draw out her 
interest, it was paid out of Hannah Ellis's 
money. And so Mrs. Howe went on; paying 
the interest which became due, out of the 
money that was last put in. 

A few of the women, who deposited their 
money with Mrs. Howe, drew out both princi- 
pal and interest, as Jane Roper did. But the 
greater number of the depositors had such 
perfect trust in Mrs. Howe's management, that 
they did not even take out the interest as it 



WHAT AEE SAVINGS BANKS? 149 

became due, but left it, with the principal, in 
her hands. 

In the summer of 1880, a newspaper in 
Boston, called "The Daily Advertiser," found 
out about Mrs. Howe. Seeing plainly that 
there must be dishonest management, it called 
the attention of the public to the bank, by pub- 
lishing an account of the deception so long 
carried on. At this, the women went in crowds 
to the bank, to take out their savings ; but of 
the many depositors who applied, only the few 10 
who came first had any of their money returned 
to them ; the rest lost all they had deposited. 

As we told you before, Mrs. Howe had not 
reinvested the money deposited in her care, as 
all directors of banks should, and she merely 
took the last woman's money and gave it to the 
first ; so, though some were paid both interest 
and principal, it was done by taking it out of 
other poor women's deposits. Most of the de- 
positors got neither promised interest nor prin- 
cipal. It was afterwards found that Mrs. Howe 
was taking the savings of these women for her 
own use, keeping a small portion in reserve to 
pay the interest to those who asked for it, and 
sometimes the principal, if they happened to 
call for it. She had bought a house with the 



150 LESSONS ON PRACTICAL SUBJECTS. 

rest of the money, and was living in luxury on 

the savings of hundreds of hard-working women. 

11 Mrs. Howe was sent to prison for several years. 



Questions on Chapter XIX. 

1. Why can a reliable corporation borrow money at 
a low rate of interest 1 

2. Why must an unsafe corporation offer a high rate ? 

3. Can you give an example of the rate of interest 
falling as an investment grows safer ? 

4. What rate of interest did Mrs. Howe promise to 
depositors 1 

5. Was this a safe rate of interest 1 Why not 1 

6. Had Mrs. Howe's bank been established according 
to the laws of Massachusetts ? What had not been done 
that the law requires '? 

7. If she had had a charter, what would she have 
been obliged to do ? 

8. Did the depositors know where Mrs. Howe got 
the money she used to pay such high rates of interest 
with 1 

9. Many poor women invested their savings with 
Mrs. Howe : how did she manage to pay such high 
interest ? Was this right ? 

10. When this dishonesty was at last exposed, could 
Mrs. Howe pay back the deposits ? Why not 1 

11. Where was Mrs. Howe sent for her crime 1 
Would you rather put your money in a bank that 

promised you twenty per cent interest, or one that 
promised only four per cent 1 Why 1 



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